DIY Craft and Microproductions: “traditional” makers

Beside Open Hardware, there is another bottom-up movement that’s slowly growing: the world of do-it-yourself (DIY) and microproductions of craft and fashion design products. There are many people designing and creating handmade product, clothes, bags and accessories, most of them consider it as an hobby, but an increasing number of people are trying to make a living on it, whether alone as an hobby (DIY) or in small groups trying to start small enterprises (microproductions). It’s not a new trend actually: the DIY culture dates back to the ‘60s and ‘70s, and craft has always existed though it was almost replaced by factories and large-scale manufacturing since the Industrial Revolution (at least in the most developed countries).

While at first sight the DIY craft world seems not to be related too much with the Open Culture, at least traditionally, it is now increasingly learning and adopting tools and processes from it, including new technologies into fashion like hardware as well (like the open hardware Lilypad Arduino, for example). As Tim O’Reilly reported in 2008, the Open Source movement underscores how communities can share expertise and build on that knowledge, and the DIY world is adopting this attitude right now. According to him the Maker movement is not just DIY, but the way in which computing is re-engaging with the physical world instead of the virtual, and this is tomorrow’s big business. Open Hardware, DIY craft, fashion microproductions, Open Design are gathering with increasing success into an informal and greater Maker movement, consisting of all the people that learn from doing and share the knowledge about it together in communities. An increasing number of documentaries, books, magazines, tutorials, conferences about managing DIY Crafts projects and businesses has been made available since few years. Maybe one reason of the success of this movement is the recession, that has moved the line between what’s produced at home and what’s purchased in markets. Anyway, selling a consulting or support service or content is the first business model for DIY Craft.

Piracy as a common business model for Fashion Design

The business models of Fashion Design can take a secret form, that has a direct connection with the Open Culture and that can be useful for building new business models for DIY Craft: piracy. Like Shanzai in China, we actually have more innovation and economic revenues when all the actors of a manufacturing ecosystem collaborate and share knowledge and project, and this shows that Open Source and Piracy are indeed a viable business model.
Kal Raustiala and Christopher Sprigman described the importance of copying in the Fashion Design ecosystem really well in their article “The Piracy Paradox: Innovation and Intellectual Property in Fashion Design”: there are no copyright or patent protections in Fashion Design, there are only trademark protections. This means that any wear or fashion product can be copied entirely, except for the brand. The lack of copyright actually accelerates creativity and innovation: one side effects of a culture of copying is the faster establishing of trends and the faster induced obsolescence, leading to more sales and revenue, and to more creativity and innovation (because the life cycle of a fashion design is increasingly shorter). Look for example at Fast Fashion brands like Zara and H&M, which are benefiting from this, copying famous high-end fashion designs and manufacturing them at lower prices (for a different market than the high end one).
Even Johanna Blakley at TEDxUSC 2010 explained what all creative industries can learn from fashion’s free culture (more informations here). Further resources are Chris Sprigman’s podcast and David Bollier’s and Laurie Racine’s report.

Etsy and the Long Tail of user-generated craft

The best example that showcases the business possibilities of the DIY Craft movement is Etsy, a social commerce marketplace conceived by Rob Kalin along with Chris Maguire and Haim Schoppik in early 2005. It has now over 6.2 million members (400,000 of them are sellers) and it’s currently selling 6.5 million items. Gross Merchandise Sales started at $ 166,000 in 2005, were $ 180.6 million in 2009 and in 2010 (September) were $ 206 million. In January 30 2008 Etsy was reported being “almost break-even”, and received $ 27 million in Series D financing.

Etsy’s main business model is creating a marketplace for the long tail of DIY Craft, charging a listing fee of 20 cents for each item and getting 3.5 % of every sale,with the average sale about $ 15 or $ 20. Etsy also has another income from Showcase, Etsy’s advertising program designed for its sellers. By purchasing a 24 hour spot in the Showcase, Etsy sellers highlight their featured items in prominent places on the site to increase shop awareness and boost sales. Prices are $ 15,00 for Holiday and Main Showcase, while for the other showcases the price is $ 7,00.Therefore, there are even doubts if the core business of Etsy is providing a marketplace for handmade goods or rather an advertising business. Moreover, Etsy has its own API to lets developers tap into the Etsy community, building their own Etsy-powered applications for the web, desktop and mobile devices.
In 2007 Etsy was reported being interested in expanding Etsy’s offline ventures: Etsy started running workshops open to local crafters and would like to provide support services, such as business advice and small loans in the future.

There are some criticism of Etsy’s business model, as well, since it seems to be not really a viable model for the makers. Only 4% of Etsy sellers are males, the average seller is a 35 years old woman and is is often a married woman with (or about to have) young children, with a higher-than-average household income, and a good education. Most probably Etsy attracts women with the hope of successfully combining meaningful work with motherhood. Unfortunately, it is very hard to make a living only with Etsy: very few sellers have done it, and the community confirms it. In fact, it seems that Etsy exerts a downward pressure on prices, since all the sellers (that live in different cities) are in direct competition and can’t increase volume (the usual answer to slim margins), because the items are artesanal and not mass-produced.

Megan Auman of craftmba.com suggests that Etsy should be regarded not just as a marketplace, but as a business incubator accelerating the successful development of DIY and Microproduction Craft businesses through an array of business support resources and services. Etsy offers a low-cost entry point into the marketplace, but as a business grows, it should think about leaving Etsy and have a different e-commerce store, a more proper step for building a rising brand (just like White Elephant Vintage did, for example). Moreover, as we said before, prices in Etsy will likely not rise because of the strong competition, and this is another reason for moving out of Etsy when the skills and the sales of a seller improves.

Threadless, crowdsourcing the design while still manufacturing the product

While Threadless cannot be strictly categorized as DIY Craft, it has a very interesting business model that can be taken as an inspiration: crowdsourcing the design and then manufacturing the products.

Threadless is a community-centered online apparel store founded by Jake Nickell and Jacob DeHart in 2000 with just $ 1,000. It is now run by skinnyCorp of Chicago. Members of the Threadless community submit t-shirt designs online; the designs are then put to a public vote. A small percentage of submitted designs are selected for printing and sold through an online store and the winners receive a prize of $ 2,000 in cash, a $ 500 gift certificate (which they may trade in for $ 200 in cash), as well as an additional $ 500 for every reprint. There are even two Threadless stores: Threadless and Threadless Kids, in Chicago.
Anders Sundelin noted that producing a predetermined demand keeps costs low and margins high, and because community members tell the company which t-shirts to produce Threadless never produces unsold t-shirts: this is why it generates more than $ 17,000,000 in annual sales with a 35% profit margin with a growing community. Moreover, Threadless has a subscription revenue stream via the 12 club (a limited edition t-shirt for 12 months) and it has also a Street Team affiliate program members earn points toward future purchases by referring sales or submitting a photo of them with a Threadless t-shirt.

Openwear: Open Source and collaboration for micro productions

If “piracy” (or at least let’s say: “copying”) is a common practice, and crowdsourcing is finding its place in the Fashion Design / DIY Craft scene with Threadless, a complete Open Source Fashion Design is just the next business model. One of the main problems of DIY Craft or micro productions scene, is that it is too fragmented and the number of products created and sold is consequently low: there is the need to make the scene more coherent and help all the actors save time and money with a common and collaborative activity. Openwear.org, for example, is a new community that created few basics open source fashion designs and is going to share with all its members, creating thus a complete open source fashion brand. In this way, all the designers won’t need to start from scratch and will save time and resources for designing new clothes.

Forward to Basics – Openwear Collaborative Collection Workshop from Openwear on Vimeo.

Stitch Tomorrow: Microcredit for Development through Fashion Design

Stitch Tomorrow is a youth-led fashion microfinance initiative from Philippine, aimed at facilitating South East Asian underprivileged teens with summer sessions in order to make them able to create their own fashion lines with clothes made of recycled materials. Stitch Tomorrow offers them education (in fashion and business), capital and resources, design, business and marketing consulting services, participation of the customers in the design and business process. Once these fashion designers can work independently, they gradually pay back Stitch Tomorrow and the interest is used for other teens the following summer.

Sewing Cafes: places for DIY Craft and Microproductions

Just like Fab Labs and Hackerspaces for the Open Hardware (and Design) movement, the DIY and Microproduction Craft movement has its own places for making, experimenting, prototyping, learning and community building: Sewing Cafes. At least since 2006 in cities like New York, Los Angeles and Boston (like Quilter’s Way in West Concord), rent-by-the-hour sewing machine cafes have opened, and now they can be found in many countries across Europe as well. There is the Sweat Shop in Paris, where users can purchase access to a Singer sewing machine (€ 6.00 per hour), the Linkle in Berlin (€ 5.00 per hour). In the UK some examples are Homemade London (£ 10.00 per hour), Make It Glasgow (£ 5.00 for one hour, £ 7.50 for two or £ 10.00 for three) and the Needlebugs sewing café in Manchester, based in a not-for-profit community arts space called Nexus Art Cafe.
There is even a Sewing Cafe in Melbourne, Australia (the Thread Den) and a Sewing Café Locator, though still under construction.
Even Etsy has a community workspace that provides equipment and donated materials where Labs members gather to make items, take and teach workshops, and attend special events. It is a permanent office called the Etsy Labs in New York. The site’s customer support, marketing/PR, business and communications teams operate out here.

A lesson from DIY Craft: microcredit as a tool for building collaborative networks

The necessity to find new business models is getting urgent in DIY and Craft microproductions, since each maker has his/her own business model and they struggle to find a balance in their growth (something hard to understand for them). As Zoe Romano and Bertram Niessen from Openwear pointed out in an interview for openp2pdesign.org, many DIY Craft makers still follow the seasonal rhythm of collections, others are experimenting flexible models. Some people are split between different activities: they are at the same time crafters and crafting teachers, or they design and realize their own collection but, at the same time, they work also for third parts in different positions of the production chain. One of the biggest problems of the DIY Craft movement (especially compared to Open Source and Open Hardware) is the extreme fragmentation of the community: in Open projects communities may be small, but there are definitely more people collaborating together in the same project than in DIY Craft. It’s easier to profit with the long tail of DIY Craft than with a single project, and here we could use microcredit as a tool for community building and for building and managing collaborative networks among the many makers.
Moreover, as reported by Zoe Romano and Bertram Niessen, the b2b DIY Craft scene has a good percentage of transactions based on the bartering of goods and services and the money are mainly left to the direct selling of end products. We should then also consider this aspect, and think about microcredit initiatives within the DIY community and microcredit initiatives even outside it. It could be even just one microcredit initiative but in the end it will work in a different way inside and outside the community, and we should use it to create a stronger collaborative ecosystem.

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Fab Labs and other places for designing and making collaboratively

As we have seen in the previous post, Open Hardware and similar Open projects can grow as communities inside specific places like hackerspaces. Such places are interesting because they are, at the same time, enablers of open and collaborative projects, and business models for them. In this post I will cover Fab Labs, as the most evolved and potentially big places (they could in fact also host hackerspaces) for collaborative projects, and their business models.
Lead by Neil Gershenfeld, the Fab Lab program is part of the MIT’s Center for Bits and Atoms (CBA) and it broadly explores how the content of information relates to its physical representation and can be embodied in or abstracted from: the intersection between information theory and industrial design. A Fab Lab (digital fabrication (fabbing laboratory) is a small-scale workshop with an array of computer controlled tools that cover several different length scales and various materials, democratizing manufacturing technologies previously available only for expensive mass production.
So far Fab Labs have been opened in rural India, northern Norway, various European countries, Afghanistan, Ghana, Boston and Costa Rica. Fab Lab outreach projects are being explored with a growing group of institutional partners and countries including Panama, Trinidad, South Africa, the National Academies, the Indian Department of Science and Technology, and the Africa-America Institute. The official list of FabLabs is hosted here, while other lists can be found here:

View Fab Labs on Earth in a larger map

There is no formal procedure on how to become a Fab Lab and the process is monitored by the MIT. All the labs around the world are in contact with each other through a common video conferencing system hosted at the MIT which is used for ad-hoc meetings, scheduled conferences and the delivery of the Fab Academy training programme.

Funding a Fab Lab: how much does it cost?

CNN reported that the Center for Bits and Atoms was funded with $14 million by the National Science Foundation in 2001. Anyway, starting a Fab Lab should be much cheaper: Fab Lab Afghanistan (in its wiki) and allbusiness.com reported that a full Fab Lab currently costs about $50,000-$55,000 in equipment and materials without MIT’s involvement. Other sources like ideasexist.com and aps.org reported that a Fab Lab should costs only about $20,000.
In 2009, the Center for a Stateless Society proposed to organize a Fab Lab using open-source tools such as the Fab@Home 3D printer, with resulting costs between $2,000 and $5,000 total. Bart Bakker of Utrecht, Netherlands built one for under € 3000. Another initiative called Replab.org proposed the construction of an open source Fab Lab that costs $12,500.
Tools lists are available on the Center for Bits and Atoms website here and here; there is even a task list for managing a Fab Lab as well.

Running a Fab Lab: Business Models

Even the official Fab Lab Charter (drafted in 2007) recognize that Fab Labs could adopt a business model for commercial activities and roughly defines some guidelines for such models:

Business: commercial activities can be incubated in fab labs but they must not conflict with open access, they should grow beyond rather than within the lab, and they are expected to benefit the inventors, labs, and networks that contribute to their success.

Fab Lab Iceland reports 4 business models for Fab Labs:

1. The Enabler business model: launch new Labs or provide maintenance, supply chain or similar services for existing Labs.
2. The Education business model: a global distributed model of education through Fab Labs (with the Fab Academy) where global experts in particular topics can deliver training from local Fab Labs or even from universities/businesses via the Fab Lab video conferencing network. P2P learning among users is also a part of this business model.
3. The Incubator business model: provide infrastructure for entrepreneurs to turn their Fab Lab creations into sustainable businesses. The incubator provides back-office infrastructure, promotion & marketing, seed capital, the leverage of the Fab Lab network and other venture infrastructure to enable the entrepreneur to focus on her areas of expertise.
4. The Replicated / Network business model: provide a product, service or curriculum that operates by utilizing the infrastructure, staff and expertise of a local Fab Lab. Such opportunities can be replicated, sold by and executed at many (or all) local Labs, with sustainable revenue at each location. The leverage of all Labs in the network simultaneously promoting and delivering the business creates strength and reach for the brand.

The most complete research about the business models of Fab Labs so far comes from Peter Troxler, especially in his paper “Commons-based Peer Production of Physical Goods — Is There Room for a Hybrid Innovation Ecology?“ (presented at the 3rd Free Culture Research Conference, October 2010 Berlin). Troxler found that in the current Fab Lab practice there is no single business model and the literature about it is quite poor. Studying 10 Fab Labs (out of 45), Troxler discovered that the labs were primarily offering infrastructures to students, and they were relatively passive in reaching out to other potential users (general public, companies, researchers). Usually Fab Labs are hosted at schools, research or innovation centres or are independent entities: funding comes from outside, from public sources or from their hosting institution while revenue from sponsoring or from users so far remained the exception; however, Fab Labs are requested to become self-sustaining within 2 to 4 years, but none of the labs studied had yet reached this stage. Most of the Fab Labs had their own employees, and a few were run by a faculty of their host university or were supported by volunteers.
Fab Labs usually use their own Internet presence as a marketing strategy; few of them actively engage in PR, and these ones attract also non-students as users. Furthermore, they had so far created a limited innovation ecosystem with few network and industry partners and few, if any sponsors, which got used rather rarely.
All labs indicated their main business model was providing access to infrastructure that users would have no access to otherwise, but most of then indicated that giving access to knowledge of the Fab Lab network and giving access to experts were equally part of their value proposition. Troxler pointed out then that there are two main business models (or value propositions) possible, namely Fab Labs providing facilities and Fab Labs providing innovation support.

Troxler further developed the concept of Fab Labs as innovation center within another paper, written together with Patricia Wolf: “Bending The Rules: The Fab Lab Innovation Ecology” presented at the 11th International CINet Conference, September 2010 Zurich. In this paper they identified four possible business models (Table 1.), among the intersections of open and closed intellectual property and Fab Lab as facility or as innovation support. Specifically, they propose the Fab Lab innovation ecology (a network of partners) as the most interesting, a Fab Lab with open intellectual property and aimed at facilitating innovation: more design thinking and stimulating innovation than just providing access and training. The primary clientele of this model are innovators, companies (particularly SMEs) and researchers, while the general public is not really important. Revenue will come from projects, services provided and partners engaging with the lab, rather than per hour or membership fees and possible sales of products or IP. The Fab Lab innovation ecosystem add the linking with a network of knowledge and experience to cheap manufacturing technologies, creating value by capturing experience and feeding it back into the network.

Fab Labs as showcase of brand values: Absolut Lab

But Fab Labs can now be opened by big brands as a marketing strategy: Absolut Vodka (the third largest brand of alcoholic spirits in the world) opened the Absolut Lab for visionary thinkers in Madrid since in September 2010

ABSOLUT LAB for Visionary Thinkers. from ABSOLUT NETWORK on Vimeo.

In 2008 Absolut Spain realized that the brand’s image was still strong but static and people were less and less associating it with creativity, something that the brand had been building since the ‘80s with its advertising campaigns and art commissioning. Absolut Spain then commissioned Strike Agency, a Spanish coolhunting firm, a great event for reviving the brand’s image. Strike Agency instead proposed a long-term project, aimed at improving the brand’s image as creative, visionary and socially conscious.
It is a project with no prospects of short-term financial returns and interested only in strenghtening the brand’s image according to its values. Furthermore, Absolut Lab doesn’t want to get money from the projects developed but charges fees for participating in workshops, and so far prices range from 50 € for a one week workshop to 180 € for a 3 days workshop.
The educational offer will be developed by ESADE Creapolis, an innovation business park based on open innovation and run by the prestigious university ESADE.

FabFund: bringing distributed manufacturing technologies to companies

Since Fab Labs have so far been dependent on fundings and have been rarely self-sufficient, Gershenfeld’s brother Alan and fellow venture capitalist Michael Angst founded a for-profit project called Fab Fund in 2007. The wiki at Fab Lab Iceland describes Fab Fund as:

a double-bottom line investment fund that seeks market financial returns through investments that empower individuals to create small enterprises and sustainable-livelihood businesses. The Fab Fund focuses exclusively on products and services that enable or are enabled by the democratizing effect of personal fabrication.

Fab Fund is a sort of “micro-venture capitalism“: its $200,000 capital has been invested in for-profit businesses that prototype or manufacture their products in Fab Labs around the world, in order to make distributed manufacturing a viable business model. The fabcompany.com website is currently down and the status of this project is unknown; anyway it seems that the Fab Academy program is currently collaborating with Fab Fund “to help global capital find local inventors and local inventions find global markets”.

Distributed Fabbing: other similar business models

Beside Fab Labs, there are more initiatives about distributed manufacturing and that are worth considering. This initiatives show different business models that can also be used within Fab Labs.

Shapeways is a company that started within the Lifestyle Incubator of Philips at the beginning of 2009 (they then decided to be independent from Philips). With Shapeways, users can 3d print their projects or selling and buying them in a marketplace (user themselves can decide the markup of sold projects: some of them gets $1,000 in profit every month). The price of a product depends on the actual volume (cm³) of material used and includes shipping (some materials have startup costs ranging from $ 1.50 to $ 5.00; most orders are between $50 and $150 but the minimum order amount is $25 per order. Shapeways’s growth has allowed them to drop prices to a third of what they were at their start: they want to be a low-margin business in order to leverage their community.
The company generated 244,000 € in revenue over 2009, but at the same time it lost 1,400,000 €. In September 2010 Shapeways received a $ 5,000,000 fund from VC Index Ventures and Union Square Ventures (the same firm that backed Twitter and Etsy) in order to open a manufacturing facility and headquarter in the USA.

Ponoko, a New Zealand company that started in 2007, is a marketplace for fabbing, sharing, selling, and buying products with laser cutting, 3d printing (with many materials) and hardware in the same project. Ponoko started offering only laser cutting, and the other technologies have been added in 2010. 5 digital factories in Wellington, San Francisco, Berlin, Milan and London were established in 2008: each hub is locally owned and operated; therefore pricing, materials, support, delivery and business terms may vary between them.
Ponoko gets paid based on the cost of the materials plus $2 for every minute the laser cutter is used. Ponoko now offers a Prime month subscription (at $ 39,00 per month), which has more advantages, services and lower prices compared to the Free account (though Prime is only available for orders made at the NZ and US making hubs). Unlike Shapeways, Ponoko does not require any setup fees or minimum order size. In 2009, Ponoko was reported to have a revenue of $250,000 a year.

100k Garages is a community of workshops with digital fabrication tools (most of them are located in the USA and Europe), supported by machine manufacturer ShopBot and the digital fabrication service Ponoko. 100k Garages provides a marketplace for professional manufacturing services with zero fees (transactions amongs designers and fabbers are in US $), rather than offering shop access to makers. A similar but non-commercial(and open source) service called MAKERFACTORY has opened recently.

TechShop is a chain of member-based workshops in the USA equipped with typical machine shop tools (welding stations, laser cutters, milling machines) and corresponding design software. Access to the workshop is through monthly ($ 125) or yearly membership ($ 1200) for individual membership, but there are also student, family, corporate or one day memberships available. TechShop also offers services like Personal Prototyping, Personal Consulting and Personal Training at $95.00/hour, with a 2-hour minimum (up to 3 additional attendees to Personal Training are permitted at $30/hour each one).

A lesson from Fab Labs: microcredit as a tool for enabling other projects

The main importance of Fab Labs (and hackerspaces and so on) is that they are enablers of Open and Collaborative projects. A whole community benefits from them, not only single makers: therefore places like these should be always at the core of business models for open and collaborative communities. Education, consulting and other services are the most common business models for makers, and they need them as well for producing and making their project at the same time. A community of makers that self-organizes could start microcredit initiatives (within and from outside the community) that specifically target, enable and incubate new projects with technologies, knowledge and marketplace access trying to enable a whole ecosystem instead of few projects without connections.

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Arduino Pro (Source: http://www.flickr.com/photos/mellis/4784333335/)

Definitions of Open Hardware

The current Open Source Hardware Draft Definition is intended to help provide guidelines for the development and evaluation of licenses for Open Source Hardware and it says that Open Hardware is “a term for tangible artifacts — machines, devices, or other physical things — whose design has been released to the public in such a way that anyone can make, modify, distribute, and use those things“. The main difference with Open Source Software is that Open Source Software is collaborative, while Open Hardware is derivative: here a fork is the rule, not the exception.
Even if Open Hardware has become famous in the past 5 years, it has been around for years: The Apple I was built by hand by Steve Wozniak, and he and Jobs were members of the Home Brew Computer Club. The hardware hacking community has never gone away; it has just adapted to the changes in technology. Open Hardware is still in its first steps though, just like Open Source Software was in the 1980s, when the GNU project began, before all the infrastructure was created.
Interesting overviews of Open Hardware can be found on Make Magazine’s Blog, MIT Technology Review, Computerworld, O’Reilly Radar. Lists of existing Open Hardware projects can be found on the GOpen Hardware 2009 website, on the P2P Foundation website (here and here), on Make Magazine’s Blog, Open Innovation Projects and Open Knowledge Foundation. Open Hardware projects are not limited to gadget and interaction design projects, but they can also be about development aid projects.
Patrick McNamara defined 4 possible levels of Openness in Open Hardware projects, that can help us understand them better:

1. Closed: any hardware for which the creator of the hardware will not release any information.
2. Open Interface: all the documentation on how to make a piece of hardware perform the function for which it is designed is available (minimum level of openness).
3. Open Design: in which enough detailed documentation is provided that a functionally compatible device could be created by a third party.
4. Open Implementation: the complete bill of materials necessary to construct the device is available.

Arduino: a successful open hardware project

Arduino is arguably the most popular Open Hardware project: an open-source electronics prototyping platform based on flexible, easy-to-use hardware and software; many versions of the Arduino hardware have been commercially produced to date. It’s intended for artists, designers, hobbyists, and anyone interested in creating interactive objects or environments. You can read a comprehensive introduction to Arduino on Wikipedia or on Alicia Gibbs’ thesis.
Most of Arduino official boards are manufactured by SmartProjects in Italy. The Arduino Pro, Pro Mini, and LilyPad are manufactured by SparkFun Electronics (USA). The Arduino Nano is manufactured by Gravitech (USA).

By 2006, Arduino had sold 5,000 units; in 2007, it sold 30,000; in 2009, Arduino was reported being on track to sell at least 60,000 of the microcontrollers. The reasons for Arduino’s success are:

1. it is a good starting point for projects;
2. at $30,00 a piece, it’s cheap and durable enough;
3. there is already a thriving community and business ecosystem where to find resources;
4. it is a mature and simple enough project.

The designs for the Arduino board are released under the Creative Commons license Attribution-Share Alike: you can produce copies of the board, redesign it, or even sell boards that copy the design without paying a license fee or even ask permission (you just have to credit the original Arduino group and use the same CC license). The only piece of intellectual property the team reserved was the name Arduino, which is trademarked: if you want to sell boards using that name, you have to pay a small fee to Arduino (this is set in order to make sure the Arduino brand name isn’t hurt by low-quality copies).
Clive Thompson on Wired reported two different business models for Arduino (and other Open Hardware projects):

1. sharing open hardware to sell expertise, knowledge and custom services and projects around it;
2. selling the hardware but trying to keep ahead of competition with better products (users will buy your products because are better than the copies, but the copies will help your products become more famous).

Clive Thompson concluded that Open Hardware is a sign that hardware is becoming a commodity and that it still has not clear business models: it’s possible that open source hardware will not compete with the for-profit world but will instead fill niches otherwise ignored.

The Market for Open Hardware

In May 2010 Philip Torrone and Limor Fried collected 13 examples of companies that are selling open source hardware: according to them, these companies, generate a turnover of about $ 50 million and there are currently about 200 open source hardware projects of this kind. They project the open source hardware community to reach $ 1 billion by 2015. Adafruit, Arduino, Chumby and Liquidware have each one $ 1 million in revenue, and Torrone and Fried estimated them to reach a $ 5 million revenue soon (while many other companies will reach a $ 1 million revenue). Sparkfun alone has even a $ 10 million revenue.

Open source hardware $1m and beyond – foo camp east 2010 from adafruit industries on Vimeo.

In January 2010, Joseph Flaherty calculated that the Makerbot (an open hardware 3D printer produced by a 3-person firm) has a revenue of $ 1,350,000-1,710,000 (1,800 * $ 750-950). The industry leader Stratasys (which uses a FDM technology similar to MakerBot) had a total revenue of $ 124,500,000 in 2008, but with a considerably bigger firm and more R&D investments. And MarkeBot has just opened a retail store in New York called the Botcave.

Makerbot Opens Botcave Retail Store in Brooklyn from Dan Patterson on Vimeo

Business Models for Open Hardware

Salem & Khatib proposed four business models for Open Hardware companies; later Edy Ferreira and Stoyan Tanev further expanded these to seven business models. According to Edy Ferreira and Stoyan Tanev, there is little research on the types of business models specifically related to Open Hardware, just like there is no consensus on the definition of Open Hardware itself as well. The open asset is different from the ultimate market offer, the manufactured hardware device itself, and hence the problems with the adoption of existing Open Source business models. Ferrera and Tanev examined 4 companies, 88 market offers and 93 Open Hardware projects, and then identified seven business models for Open Hardware:

1. Services (customization, consulting) over owned or third party Open Hardware.
2. Manufacturing of owned or third party Open Hardware.
3. Manufacturing of proprietary hardware based on Open Hardware.
4. Dual-licensing: companies owning Open Hardware designs that are offered for use under either a GPL license or a proprietary license. The design does not contain any proprietary module.
5. Proprietary hardware designs based on Open Hardware.
6. Hardware tools for Open Hardware: companies selling the right of ownership of development boards for the testing and verification of hardware devices manufactured on the basis of the Open Hardware assets. The designs of these boards are entirely proprietary (another related example is Sparklelabs).
7. Proprietary Software tools for developing Open Hardware.

Furthermore, there are three more business models for Open Hardware already implemented:

1. Free service for building a greater user base: Adafruit created Adafruit Jobs Board as a marketplace for designers, makers, programmers, artists, engineers and companies who want to meet and work together. This is a free service, but in order to use the job boards users must be Adafruit customers.
2. Partnership between Long Tail Open and Fabbing businesses: Ponoko has teamed up with SparkFun Electronics to enable its users to build custom electronics products combining Ponoko’s laser cutting technology with a 1500+ strong electronics catalog from open source electronics supplier SparkFun.
3. Funding Open Hardware projects for getting good Open documentation: In August 2010, Bildr offered to fund original user projects in return for good documentation: in this way it would have promoted a bildr user by showcasing his/her work and paying for the parts to construct it. In return, Bildr would have got more information for its wiki, blog and community under the MIT software license.

Manufacturing Open Hardware

But business models are just half of the issue of developing a thriving Open Hardware project: we should also focus on the manufacturing of the Open Hardware projects, a step that we don’t find in Open Source Software. The value of manufacturers is in economies of scale: cheap high-quality objects or a superb shopping and support experience. But what about manufacturers of Open Hardware?
According to David A. Mellis most open-source hardware projects (including Arduino) seem not to have taken advantage of the distributed manufacturing models enabled by the open nature of their designs. Instead, we mostly see two conventional distribution models: centralized manufacturing (that makes the product available in many places, but increases the cost to the consumer) and artisanal production (this keeps the costs low because there’s only one party profiting from a product, but at the same time it limits the product’s availability).
Mellis suggests then to adopt a distributed manufacturing model: a number of smaller groups independently producing the same design for local distribution.

Significantly enough Chris Anderson, in his “In the Next Industrial Revolution, Atoms Are the New Bits“ article, suggested to manufacture Open Hardware projects in China using alibaba.com (until a complete distributed manufacturing ecosystem will be ready), the largest aggregator of the country’s manufacturers, products, and capabilities. Alibaba.com doesn’t aggregate only companies suitable for manufacturing Open Hardware projects, but it is an interesting company as well and it takes us directly to the Long Tail business models.
Anderson reports that Alibaba, founded in 1999, has become a $12 billion company with $ 45 million registered users worldwide. Over the past three years, more than 1.1 million jobs have been created in China by companies doing e-commerce across Alibaba’s platforms.

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 a 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 another interesting business model for Open Hardware that is just blooming: microcredit and peer-to-peer lending / 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. The principles of the Open Source Hardware Reserve Bank are:

• Reduce margins and share costs for the community.
• Minimize the risk and opportunity cost of unsold inventory.
• Provide incentives for Open Hardware projects to move to production without risks.
• Allow the building and distribution of low-quantity, non-scalable products (e.g. niche applications that are potentially non-VC fundable).
• Give rewards and profits back as close as possible to those who contributed.

The Open Source Hardware Reserve Bank (which still has to fully comply to the laws that regulate lending) allows only hackers (no VC or other companies) to make investments in specific projects, buying and funding at the same time, doubling then the number of pieces created and reducing per-unit costs by around 10 percent to 30 percent.

Products (Source: http://www.oshwbank.org/)

Equations (Source: http://www.oshwbank.org/)

Moreover, they designed an infovis that visualizes the state of the funding and manufacturing of each copy of a Open Hardware project. Each cell identify one copy of the Open Hardware project, and the smaller cell on the top represents the 15% markup charged by the Bank (as opposed to the normal 30-50% or more charged on electronics). All the cells are numbered and sorted on a waiting list for receiving the manufactured copies. If a cell is white, there is a copy available in the queue, otherwise the color will be blue (for personal copy) or yellow (for copies funded with microcredit). When somebody funds the manufacturing of one more physical copy, he/she won’t pay the 15% markup; when the copies funded will be two, he/she will save the 15% markup and the shipping fees. Funding 5 copies makes you an investor in the specific Open Hardware project, getting a 15% return on investment.
For every funding, the Bank will issue a certificate like this:

OSHW reserve note (Source: http://www.oshwbank.org/)

A lesson from Open Hardware: expanding microcredit certificates

All the previous cases can be seen as the state of the art for business models related to Open Hardware projects. They can be taken as example as they are, or expanded further; anyway there is one aspect that can be stressed out and I think it can be important for managing such open projects: let’s consider how a community could self-fund its projects through microcredit as a license.
Even without considering radical projects like all the Open Money and Metacurrency initiatives that proposes new forms of currencies, we can think more about further joining existing currencies with microcredit certificates like the Open Source Hardware Reserve Bank ones. There is the need of accurate, portable and shareable tools of reputation ranking, able to interconnect different local contexts and attached to existing currencies. The Open Hardware still needs proper open-content licenses, since with current licenses we can protect the design but not the manufactured product or forks. And Open Hardware projects will have the need of warranties and conformance marks about the proper function of the manufactured product. Why don’t we use the microcredit certificates for these tasks as well? We could design microcredit certificates to act as a conformance mark, warranty and license certificates as well: only the community can issue them and use them for its own self-organization.

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A recent post on Shareable made me think about how the culture of Sharing has been changing the discipline of Design after the success of Open Source and the Web 2.0.

We are researching and discussing how we can bring collaboration into design processes and how we can use design processes to foster collaboration, but what about developing design projects for facilitating the sharing of physical goods?

Keara Schwartz wrote a post on Shareable, trying to start a conversation about this issue; however, that post is not really deep and inspiring since she finds that the only barrier to sharing products is the lack of trust in other people we have in sharing physical products. According to Keara Schwartz, we can share digital information easily, but not physical goods as well because we don’t believe other people will take care of them as we would do; she then suggest that products might be designed differently in order to facilitate their sharing.
I believe though that this is not the point: we don’t share products because our socio-economic system has developed in that direction, not because products are not designed for being shared. And designing for facilitating the sharing has wider (and older) implications.

Nonetheless, that post is a good starting point in order to think about the issue of Design for Sharing: we have to notice that Shareable is a nonprofit online magazine that “tells the story of sharing, covering the people, places, and projects bringing a shareable world to life”. And its tagline is Sharing by Design, implying that sharing can be enabled with design.

02. Access by Design

We could argue now that we are entering into the Age of Sharing, since after the success of Open Source and of Web 2.0 new terms, theories, technologies, products and services that are based on the concept of sharing (and collaboration) are increasingly introduced. But these trends started before, though a little bit different, as Jeremy Rifkin clearly explained in his book The Age of Access:

In the hypercapitalist economy, buying things in markets and owning property become outmoded ideas, while “just-in-time” access to nearly every kind of service, through vast commercial networks operating in cyberspace, becomes the norm. We increasingly pay for the experience of using things-in the form of subscriptions, memberships, leases, and retainers-rather than for the things themselves. […]
Rifkin argues that the capitalist journey, which began with the commodification of goods and the ownership of property, is ending with the commodification of human time and experience.

As Rifkin noted, the transition from owning products to accessing them through a service started long time before the rise of the Web 2.0; it is therefore a longer trend coming from the evolution of society and economy. Design for Access came before Design for Sharing. Design, and especially Product Design, in the Age of Access means above all Product Stewardship, a concept developed as a Design for Sustainability effort with the aim of involving all the stakeholders of the life cycle of a product. With this approach, we ask all the stakeholders to take shared responsibility for the impacts to human health and the natural environment that result from the manufacturing, use, and end-of-life management of products. If we want to just access a product instead of owning it (and maybe the service is built upon its sharing it with other people), we need a lot of different players that actually manage it through its life cycle.

Product stewardship is a concept whereby environmental protection centers around the product itself, and everyone involved in the lifespan of the product is called upon to take up responsibility to reduce its environmental impact. For manufacturers, this includes planning for, and if necessary, paying for the recycling or disposal of the product at the end of its useful life. This may be achieved, in part, by redesigning products to use fewer harmful substances, to be more durable, reuseable and recyclable, and to make products from recycled materials. For retailers and consumers, this means taking an active role in ensuring the proper disposal or recycling of an end-of-life product.

Accessing a product, instead of owning it, means that the traditional life cycle of a product has to change and to be shared among all its stakeholders. Design for Access and for Sharing is more about new processes than new product typologies and technologies: it could be a way to design more proper and sustainable products (like the Universal Design / Design for All approaches).
In this direction, the post written by Andy Polaine on Core77: “Access, not ownership is the route to better products” is much more interesting and developed; moreover it explains clearly the subtle difference between Design for Access and Design for Sharing:

But sharing is different from having access to something. Sharing implies owning something first and then sharing it with others. Access can mean that a company or community own something rather than an individual, but that individuals can use it. It’s still sharing, but it doesn’t feel like you are using other people’s stuff.

Designing products to be part of an entire service-product access-not-ownership system has benefits all around. Designers can focus on designing the best product with the highest build quality possible, manufacturers enter into a longer term relationship with consumers and consumers get to use high-end products. Access, not ownership also means less use of resources and less consumer junk stowed in drawers for a few months on the way to the landfill.

03. Design for Sharing, reusing and sharing existing resources

Design for Sharing must thus start from Design for Access, developing not only better products but new product life cycles, creating systems of players interested in the products.
But yes, many of the Access businesses that Rifkin forecasted are actually taking the form of Sharing businesses: we access to products (and services) instead of owning them, not only when they are developed and offered by a company, but even when they are distributed in society (that is, social networks) and companies are just networking people to who owns (or has access) to the resources that are needed. Enter the Age of Sharing.
We could note just two books about to be published in September 2010 that tracks this change:
“What’s Mine Is Yours: The Rise of Collaborative Consumption” written by Rachel Botsman and Roo Rogers, and “The Mesh: Why the Future of Business Is Sharing”by Lisa Gansky. Lisa Gansky is building a directory of sharing businesses at meshing.it and Rachel Botsman and Roo Rogers are even suggesting us to share their book.

WHAT’S MINE IS YOURS from rachel botsman on Vimeo.

Design for Sharing can take place only if there are businesses built around sharing (and not owning), and we are approaching this stage now, since design is actually a way to shape a business and develop it around the users. Good design can’t be separated from good business and a big enough market.
How can we Design for Sharing? Developing a business about the sharing through social networks of new goods or existing and already distributed goods.

Let’s take a new example that clearly shows how we can develop Product-Service Systems (a business based on a product and on a service) reusing existing resources and products, in order to enable the sharing of physical products: SoBi, The Social Bicycle System (http://socialbicycles.com/).
Crunchgear and Wired already reviewed it.

The Social Bicycle System from Ryan Rzepecki on Vimeo.

SoBi will be the first public bike share system with the authorization, tracking, and security systems attached to the bicycle itself. SoBi uses GPS, mobile communications, and a secure lock that can attach to almost any bicycle and lock to any regular bike rack. The system does not require separate infrastructure and can be deployed at approximately one-third the cost of existing systems. Administrators will be given powerful tools to manage demand and map patterns of use. Users will enjoy door-to-door transportation and an interactive cycling experience that can track miles traveled, calories burned, CO2 emissions offset, and connections to other Social Cyclists.

For the full description of the Product-Service System, please go to http://socialbicycles.com/design/.

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For this reason, I’m going to cover int this post a research that has been developing in the past years and it’s really interesting and important for future P2P scenarios intended as a way to develop projects for a sustainable society.

This post is about the recent researches of prof. Ezio Manzini, from the DIS (“Design and Innovation for Sustainability”) research unit of Milan Polytechnic Faculty of Design.

The most interesting point of these recent researches is that they started considering the role of design for sustainability not just in terms of an engineering problem, but a social and systemic one. In fact everywhere the focus had always been before on Ecodesign, that is an approach to design products with special consideration for its environmental impacts during its whole lifecycle, trying to reduce the material and energetic resources used. Unfortunately, we slowly recognized in the past years that so many times these strategies are unsuccessful because lighter products only bring even more products in the market, in what is usually called a rebound effect. Designing ligther products most of the times bring more consumption of such products, and therefore more consumption of resources, and we need therefore radical changes in the society and the economy.
Instead, Ezio Manzini’s recent researches try to research how radical changes about using at best the planet resources actually come from changes that take place as social innovations developed by creative communities, that is people inventing new and sustainable ways of living and producing.
These social innovations are often new forms of collaborative organizations using social networks, open source and p2p communities to reduce our footprint. These innovations and the creativity that generates them are distributed, that means that every locality can take part in this challenge with an active role. The best outcome will happen when this localities, even if small, can be open to other localities forming collaborative networks (the small, local, open, connected scenario. A scenario where the global is a network of locals.
This is a completely different approach from the usual and reductionist Ecodesign one: this is looking for social innovations adopting an open innovation community-centered strategy.

The evolution of these researches can be traced back to the Sustainable Everyday exhibition and book (2003), the EMUDE (Emerging User Demands for Sustainable Solutions) program (2005-2006) and then with the DESIS Network (2008 – …).

From the Sustainable Everyday exhibition originated the The Sustainable Everyday Project (SEP), a project that proposes an open web platform to stimulate conversations about sustainability hosting several research activities and didactic workshops. The Platform is an organization and communication tool providing an open web space and visibility for activities relating to the fields of design and sustainability in the everyday context. SEP is an independent network funded by public research projects and organization of events.

EMUDE was a program of activities funded by the European Commission, the aim of which was to explore the potential of social innovation as a driver for technological and production innovation, in view of sustainability. To this end it sought to shed more light on cases where subjects and communities use existing resources in an original way to bring about system innovation. From here, it intended to pinpoint the demand for products, services and solutions that such cases and communities express, and point to research lines that could lead to improved efficiency, accessibility and diffusion.
EMUDE was promoted and developed by a Consortium of European universities and research centres. In order to identify a collection of promising cases it had been set up a network of observers, known as Antennas, encompassing teams of researchers and students from 8 European design schools. You can download the project’s brochure, the final report and two books resulted from this project here.

The DESIS Network supports social innovation using design skills to give promising cases more visibility, to make them more effective, to facilitate their diffusion. And to help companies and institutions to understand the promising cases potentialities in terms of enabling services, products and business ideas. The DESIS Network also reinforces the design community’s role in the social innovation processes operating in the design community (developing dedicated design knowledge) and outside it (redefining the perceived design role and capabilities).
DESIS-International is a light, no-profit initiative based on the auto-organization of several local networks in different countries, the DESIS-Local. Given this peer-to-peer approach, each existing DESIS-Local is committed to actively participate at the international initiatives, to develop horizontal collaboration with other members and, in particular, to support with its own competences the start-up phase of new DESIS-Local.

DESIS-Local Networks in work:

• DESIS Africa
• DESIS Brazil
• DESIS China
• DESIS Colombia

DESIS-Local Networks in founding:

• DESIS Europe
• DESIS USA

To get better the full picture, you can have a look at this long presentation from Ezio Manzini, that explains this scenario and his researches with some real cases as examples:

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The Cosmonaut in 5 steps from Riot Cinema on Vimeo.

The Cosmonaut is a feature film project by Riot Cinema Collective from Madrid, Spain, that uses Internet to find funding and distribution, in a collaborative way and under free Creative Commons Attribution – Share Alike licences. The Cosmonaut is a movie about memories, and as its website says: “Even those memories which never existed”:

What if you got back home… and there was nobody there?

In 1973, the first Russian cosmonaut on the Moon is unable to make his way back and is declared missing in Space. However, through ghostly radio messages, he claims to have come back to Earth and found it empty, not a living soul. His unreal presence and voice will little by little destroy the world of his loved ones.

You can read more on the movie website where you can find the script, a dossier about the movie and other informations about locations and costumes. The project is really well documented, you can even find the timeline of the project and the list of all the people working on the movie. And the movie has even the support of Richard Stallman!

And aside of the movie itself, what is realy interesting for us is the business model they developed:

• Crowdfunding. From 2 euros, anyone can become a producer in this film. In exchange, this person will receive presents and other benefits.
• Capitalization.The people and companies involved in the team are also investors. They contribute, the equivalent to their salaries or resources and, in exchange, they receive in exchange a proportional percentage based on the total budget.
• Advertising and sponsorship. We are looking for companies which want to join their name and brand to our project as sponsors; with a careful presence through the different stages of the film. Always from a non-invasive, non-annoying approach.
• Investors.Instead of getting gifts and special offers, you can invest in a percentage of the film. From €1000 and with a joint venture agreement, they can receive part of the benefits the project may produce. (Ask how at [email protected]).

This is the source code that will be open and freely available online:

• The film in HD.
• All the footage.
• Music and original audiomix.
• Graphics and designs used in the website and dossier.
• Original texts and derived ones.
• Works from artists who have transferred them for their use: poems inspired on the film, alternative soundtracks, sounds, graphics…

We will promote derived creation through several contests to look for the official poster, alternative editing, the perfect soundtrack… Something you create may even end up in the film.

It is important to follow this project in order to see if the business model works and if we can try to adopt it in other projects. We should also note that, at the moment, the movie itself will be created in a closed team, and it will be shared only once it’s completed. It’s a common trait of Open Movies so far: examples are Rip! Remix Manifesto, A Swarm of Angels and the Open Movies produced with the open source 3D software Blender: Elephants Dream and Big Buck Bunny (and the current one Project Durian).
I think that we can push such Open projects forward, with a real open and collaborative design process, but right now the tools, processes and systems we need are not completely ready yet. Such projects as The Cosmonaut are important because they are building and sharing with us such tools, processes and systems.

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Even if slowly, an usually competitive and ego-driven professional community like the design one is starting to realize what are the potentials for the collaboration and sharing of Open Design initiatives. The design discipline realizes the importance of the creativity that also lies outside its community of practitioners, the distributed creativity that can be found within the whole society.
This process of discovering distributed creativity is followed by a more difficult process of building the distributed manufacturing system that will back Open Design initiatives. Right now, we are in a moment where we are studying how a distributed creativity system can design and how a distributed manufacturing system can manufacture according to open and peer-to-peer models and principles. These two trends complete each other and are necessary in order to spread Open models further toward an Open society.

One of the main reasons we can find such experiments right now is mass-customization: Open Design initiatives represent a promising way to put in practice mass-customization activities that really involve the end-user and give him/her a strong position in defining the product/service. In this way, we can generate direct value and also an indirect whole ecosystem of economic actors (and therefore more economic value). This is the case of the MIT researech about Open Source Buildings (or Open Architectural Design): MIT Open Source Building Alliance Operation (OSBA).
This project was firs presented with the paper written by Larson K., Intille S., McLeish T.J., Beaudin J., Williams R. E.: “Open source building — reinventing places of living” and published in BT Technology Journal, Vol 22 No 4, October 2004.
It is a project run by the House_n department, and it will operate as an open source organization. A website have been established for idea generation, technical evaluation of OSBA recommendations, and public comment. OSBA members and affiliated academic researchers will engage in research to develop, test, and establish prototypes and test beds.
It is a very well structured project, and it addresses in a clear way the mass-customization aspects and the opportunity to generate economic value and also let people modify their homes through time. Also, we should mention that they are addressing a very important issue such as distributed generation and how it could be implemented in future buildings. Therefore it could be an interesting project also for the generation of a P2P energy grid.

This is the whole scenario behind the project:

• Scenario part 1 — developers as integrators
  Residential developers now specialise in the process of acquisition, financing, and an increasingly complex public approval processes. They form business relationships with competing ‘builder-integrators,’ who manage the process of delivering individually tailored homes.
• Scenario part 2 — design, configuration and industry standards
  Multifamily buildings are the first to adopt ‘open source building’ strategies. With a lengthy approval process, buildings must be designed long before an apartment buyer enters the process. To decrease risk and increase sale prices, developers now separate the building into two components: an open loft base building ‘chassis’ that efficiently integrates the essential services of a building, and customised ‘infill,’ configured by the user at the point of sale, fabricated to order and quickly connected to the chassis.
• Scenario part 3 — fabrication and installation
  When a design is complete and the buyer transaction executed, a description of each system is transmitted to the integrator’s assembly factory. The integrator receives just-in-time deliveries of the required components from manufacturers and distributors, taking advantage of supply chain management tools similar to those developed in the automotive industry. With standardised connections, and tighter dimensional tolerances, the fit-out takes no more than 10 days. Although the systems of the home are functionally integrated, they are also carefully disentangled so that each can be changed during design or use without affecting the performance of the larger system. Most devices and systems have IP addresses and communicate wirelessly or by powerline carrier, allowing, for example, lighting control to be made and changed during the occupancy of the home.

The main architectural design concept behind this project is modularity; this concept let designers separate a building into a chassis (providing structure, power, communication, etc.), and mass-customized modules called infill (for interior fit-out, exterior facades, electronics, communication, etc.). Component design, engineering, and integration are at the system level. This means that only the infill part can be modified by the users, leaving the more structural and complex part to the architects.

The goal of the Open Source Building Alliance is to develop key components of a more responsive model for creating places of living where:

1. developers become integrators and alliance builders to offer tailored solutions to individuals;
2. architects design design-engines to efficiently create thousands of unique environments;
3. manufacturers agree on interface standards and become tier-one suppliers of components;
4. builders become installers and assemblers
5. customers (home buyers) become “designers” at the center of the process by receiving personalized information about design, products, and services at the point of decision.

Eric Hunting adds that it is a very significant initiative, given the context of the current housing-derived meltdown:

“The recent global economic crash, centered as it is on the collapse of the housing finance system, presents a great opportunity for global change, The conventional western industrial model for housing has utterly failed and it is simply no longer a viable proposition to house oneself through life-long debt rationalized on the delusional assumption of an ‘investment’ premised on perpetual property value growth. All across the western world people are in a state of abject terror, succumbing in the millions to radical changes of fortunes not of their making and whose causality they scarcely comprehend, screaming for a better way of securing the staples of life. And this better way must develop from the bottom-up, starting with the way homes and communities are built and how that determines the means by which they can be financed and that investment managed over time. The now failed system of home finance has been premised on a specific choice of building technology co-created with it; a technology cultivated for its ability to maximize virtual value of property through the volume of labor invested in it, binding that abstracted value to the land by what was built on top of it through its lack of adaptiveness and demountability -the economic consequence of the delusion of architectural permanence. A Ponzie scheme of lumber and nails. This has to change. We must disconnect the value of land from the value of structures to economically stabilize them both and radically alter the labor quotient of construction to stop the virtual inflation of its value, bringing it as close as possible to the level of its material resource overhead, potentially leveraged by casual sweat-equity. It’s immoral for the staples of existence to be debt-dependent. Civilized people should not be confined in mobility by the fungibility of their debts as this is nothing more than indentured servitude. We must awaken to the reality of the tragic usury surrounding us -consuming us- and end it. This can start with the home.

I think a concerted effort toward open source architecture, focused on housing and community, now has an opportunity to break the backs of the hegemonies that have run us, and the global economy, aground and help to cultivate that new way the society now desperately needs and demands. The time is right. The tools are at hand. We just need to gather together those minds that can focus beyond the panic and get to work. And I think this can start with a simple question; what if houses were designed/made like computers and evolved at the same pace?”

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In the last years the “Design” word has become widely acknowledged outside the community of designers and as everyone agrees on its importance it is now used more than the word “project“. This has happened because a “project” cannot exist on its own, but it is the object of a “design methodology” applied in a “design process” that happens within a “design community“. Designers and all the stakeholders (the design community) that work together using a shared set of artefacts, roles and rules (the design methodology) in order to develop (the design process) a project.

“Design” is therefore not only product design, web design, graphic design, interior design, architectural design and so on, it is a wider term that overlaps disciplines and fields and refers to the collaborative construction of a project about the future. The “Design” word is so important because it tells us about a conscious construction, a social construction: the way we are planning the future or, better, the way we are organising ourselves to face the future. And this means that we can design the way we can change ourselves as a society, the way we can innovate and find sustainable solutions to our problems and needs. This is why Design is very important for the shift from an unsustainable society to an economically, socially and environmentally sustainable one.

Nowadays there is a common agreement about how our society needs to be able to change and adapt to the fast changes that happens in the economical, social and environmental dimensions. We are interested not in single and few changes, but in the ability to continuously introduce new ideas in our products, processes and organizations in order to maintain our conditions or improve them. We are interested in the ability to innovate our activities in what they do and how they do it.

If we think that the changes and innovation we need can be planned and should be developed as a collective project, then Design could be used as a strategic tool that we can adopt in order to generate them, as every project is about a change, applying ideas and mediating multiple interests. These characteristics become even more important right now, as the Innovation models are changing from a closed type to an open one, where new ideas and applications are to be found in the social network outside companies and institutions, and therefore there is such need for mediating multiple interests. Right now, Open Innovation is the most promising way to generate the changes we need using the distributed creativity and collective intelligence of the whole society, and designers can find more opportunities as long as they manage to valorize not their own creativity but the distributed one of the society.

This shift of perspective from a closed innovation to an open one comes from the realization that in the recent years the most promising way to innovate comes from the Free Software / Open Source / P2P movement. I usually prefer to refer to the dynamics, principles, processes and organizational forms that these phenomena generated as Open P2P rather than just Open, because Open and P2P are two different concepts that integrate each other and that we should not separate in order to fully appreciate the innovations they propose. Within the Free Software / Open Source / P2P (Open P2P) communities innovations are generated in an open and peer-to-peer way as the outcome of collaborative activities: it is a social system, a collective intelligence that develop changes and innovations through self-organization processes.

What is extremely interesting for us is that in the past decade the Open P2P principles and practices have been spreading from software development to many other fields: from Open Source Biology and Biotechnology, to Open Source Religion, P2P-based micro-credit, gold mining and Open/Free Beer for example. And the Web 2.0 services too come from the Open principles and practice, becoming a powerful vector for spreading even more interest in collaboration and sharing throughout society. Rather than a specific method for a specific field, Open Innovation and Open P2P organizational forms can be applied to all the disciplines and cases where we can gather a mass collaboration from the participation of users and citizens.

We are approaching a period where collective intelligence and mass collaboration gain importance in more and more activities in many different fields, and therefore we need tools and practitioners able to face such phenomenons and the complexity they show. Knowing that mass collaboration needs products, services, infrastructures and artefacts in order to work, we may say that there is a huge potential for designers if they become able to face such needs. Furthermore, as we can see open innovations, the activities of Open P2P communities, as social projects, there could be more opportunities for designers in such processes thanks to their experience in managing projects. But there could be also some risks for designer: as everyone can become a designer in a mass collaboration project or design initiative, they could lose some importance in the job marketplace.

But as these initiatives are about projects, designers still have more expertise on developing a project than other people, and should redefine their role in order to get more importance. Designers will be still relevant if they adapt to the changed landscape and find a new identity, redefining their knowledge and expertise; and this is what they are doing in the Open Design (and Open P2P Design) movement.

02.The rise of Open Design and of Open Peer-to-Peer Design

Since the year 2000, the design discipline has been learning how to become more open and based on peer-to-peer dynamics, from just few pioneers in the beginning to the constitution of a larger community right now. The first example of Open Design was Thinkcycle, a project that started on March 2000 by a group of graduate students in the MIT Media Lab (Ravi Pappu, Saul Griffith, Nitin Sawhney, Yael Maguire, Wendy Plesniak, and Ben Vigoda). Their idea was to create a database, accessible over the Web, that would enable “open source” problem solving among design university students and communities in the developing world. One of the motivations behind ThinkCycle was to work on problems in communities not being well served by new technologies. To get at these problems, ThinkCycle asked non-governmental organizations (NGOs) and other stakeholders related to underserved communities to submit worthwhile challenges for the students. It was very ambitious, complex and promising, even more for being the first working Open Design experimentation; it grew in a collaborative network of design courses at universities in Kenya, Brazil, Costa Rica, Portugal, and India, and then ended few years later. Some of the people behind it gave birth then on August 2005 to Instructables, a web-based documentation platform where passionate people share their projects or product hackings, and learn from and collaborate with others. From the first Open Design experimentation (Thinkcycle) to the first Web 2.0 Design Community (Instructables).

In May 2005 an Israeli designer, Ronen Kadushin, put some of his projects online under a Creative Commons license, becoming therefore famous as the first Open Designer.

Another very important experiment was Open Health, one of the first example of P2P-inspired Design, led by Hilary Cottam and Charles Leadbeater within the RED design unit of the British Design Council during the years 2004-2006. Within this project they proposed a new approach to public services, that must be co-created with end-users in communities of co-creation, where users and professionals work using all the resources already existing with peer-to-peer dynamics, based on a common platform that makes possible the activity of many participants. This project is very important because it propose a whole different strategy: they were not interested in publishing a project in an open way, in order to foster a community around it; they were interested in building open communities of citizens with peer-to-peer relationships. We have therefore an Open Design (the design of an open project), and a P2P Design (the design of a peer-to-peer system): it was not about designing an open source-like project, it was about designing open source-like communities.

At the beginning of 2005 those were the first important experiments about Open Design, early and almost isolated pioneers of an Open Design scene that still did not exist yet. But it was already possible to start to study the issues of Open Design looking at the different perspectives each one of these experiments proposed: not-for-profit Open Design (Thinkcycle), Web 2.0 Collaborative Design (Instructables), individual Open Design (Ronen Kadushin), P2P Service Design (Open Health). And this was the Open Design scene when I started my research in March 2005, when I tried to study how Design could be used to improve the sustainability of localities, as in the years before the relationship between Design and Locality started as an interesting research subject in Europe (the Spark! initiative) and Italy (ME.Design, a complex initiative I participated in some months earlier).

The idea, at the beginning, was to study how to develop a design project with/for a community, as a locality is always linked to its social systems (I prefer to talk about a Community/Locality or Local/Social Systems), and at that time the Open Source and Free Software communities were already acknowledged for their community-based organizational form as a promising way to study how to organize projects in a community. That initial idea then became the Open P2P Design methodology I proposed in my master’s degree thesis in April 2006; I started some months later the openp2pdesign.org project, as an effort to further research the Open P2P Design application, build a networkaround it and experiment it.

What has happened since then? Thanks to Open Source and Web 2.0 the Open P2P principles are spreading and being more acknowledged, while the idea of an Open Design or an Open P2P Design is changing from just an experimentation or an hypothesis into a real experience, a viable business, and a social opportunity.
Starting from initiatives like Arduino, we can see now how the Open Hardware movement is rising and becoming the second wave of Open Source application after Open Source software. New projects, business activities and researches are building its development, and this is a very important step towards and Open Design, not just because hardware can be sometime used in design projects, but because with Open Hardware we are witnessing how Open Source can be applied to rival material goods and not just to non-rival informations.
With Openmoko, we have now the first open source product for the masses, that is open for its software, hardware and design: a smartphone that is completely open. And it’s not just an open product, it is an open tool that we can use and modify in order to design collaborative activities with Open P2P organizational forms and to help a community self-organize in a more proper way.

And now, with desktop manufacturing machine’ prices dropping, with the birth of open hardware 3d printing machine like RepRap and Fab@Home, with Web 2.0 manufacturing marketplaces like Ponoko and Shapeways, it’s easier for us to manufacture a product at home. We can compile a design into an object, in order to look for its bugs and use it. Therefore we are now ready to develop a project, to compile it and test it quite easily; we are ready to share it and to sell it at home and on the Web. We can now put in practice, open, collaborative and peer-to-peer business and projects based on rival goods at local and global scale, paving the way for building more sustainable distributed economic ecosystems that can use, save and valorize local material and energetic resources while improving the local social networks at the same time.

03. Expanding Open Design with the Open P2P Design concept

Open Design is now a viable option, but there is a further step that can help us developing it and spreading it more, and it is my proposal as Open P2P Design. It is a slightly different concept, that integrate Open Design but extend it. I wrote before that the first Open Design pioneers showed us the possibility of an Open Design (the design of an open project), and the possibility of a P2P Design (the design of a peer-to-peer system): Open P2P Design integrates both possibilities under a common approach and further extend it to all the mass collaboration cases. While Open Design focuses on opening a design project, Open P2P Design focuses on building a community or social system that follows Open P2P principles and organizational forms in order to put in practice a collaborative activity that generates Open Innovations. With Open Design we offer a design project to an Open P2P social system; with Open P2P Design we co-design and enable an Open P2P social system. Not just open processes and open contents, but also peer-to-peer relationships.

What are the differences? First of all, while Open Design is about design projects, Open P2P Design is about mass collaboration-based activities or community-based activities: it could be applied in many fields, as long as there is a critical mass of participants who want to participate and collaborate. Open P2P Design is a way to generate Open Innovations through the Open P2P Communities and their collaborative activities it enables. Therefore Open P2P Design could be adopted in many fields, and Design is one of them: Open P2P Design can be adopted to build the Open P2P social system for Open Design projects or Open Source Biotechnology research as well.

Secondly, publishing alone is not enough in order to put in practice an Open Innovation or Open Design project, and now we are ready to think how to consciously build a social system interested in the publishing and further development of activities or projects. The social side of an Open P2P activity is so strong that it does not survive without strong social networks of participants: Open Design is not really open without a community or social system around it.

And thirdly, Open P2P Design is not about a project or an innovation, but it’s about how to organize the process and the tools that leads to a design project or an innovation. Therefore Open P2P Design belongs to a different dimension: we enter in the meta- dimension of meta-design and meta-innovation. Meta (from Greek: μετά = “after”, “beyond”, “with”, “adjacent”), is a prefix used in order to indicate a concept which is an abstraction from another concept, used to complete or add to the latter. In epistemology, the prefix meta- is used to mean about (its own category). For example, metadata are data about data (who has produced them, when, what format the data are in and so on).

Meta-design is therefore the design of the design process/tool, meta-innovation is innovating the way we innovate. The Open P2P Design methodology is intended as a tool to organize the development of collaborative activities project; more specifically, in Open P2P Design the Open P2P principles, practices and organizational forms are both a Design Methodology and a Design project or Design goal. We use Open P2P forms in the design process in order to co-create other Open P2P forms.

Open P2P Design does not refer to a project (intended as the outcome, the object of a design activity), but it refers instead to the design process and tools that can be used to develop that project; Open P2P Design does not refer to a specific innovation, but it refers to the way we can set up and facilitate collaborative processes that develop the innovations. With Open P2P Design, we don’t design the solutions, but the tools and processes a social system, a community, a collective intelligence can use in order to find its own proper solutions.

The idea of meta-design and meta-innovation comes from a reflection about the same Open P2P phenomenon in software and knowledge production. I think that the most important innovation of Free Software / Open Source / P2P movement is not a new kind of licenses, but the way a license can facilitate the emergence of a community. In a broader term, the Open P2P phenomenon is not really about publishing information under a certain license and through a specific software; the Open P2P phenomenon is about giving the right tools to a social system, a community, in order to enable it self-organize and build an evolution of the original information to solve its own problems and needs.

A Design discipline interested in enabling a community rather than designing an artefact is going to undergo a very important change: from artefacts to social systems, from objects to networks, from providing a solution to enabling a social system collaboratively produce a solution. This is a very interesting challenge for designers that have to face now the changes about copyright and IP brought by the digital revolution, and the rising of mass-collaboration-based creativity initiatives. It’s not only about opening their project to someone else, which is a big step too that is needed towards Open Design; it’s about shifting from a role of provider of their own creativity, to a role of enablers of the distributed creativity. From providers of a solution, to enablers of a social system who will eventually provide such a solution.

The designers that will be able to understand this change will have more opportunities in a marketplace and a society that give more and more importance on mass collaboration and sharing of information and knowledge rather than in proprietary creativity. Furthermore, they will be able to find a place in the very important social learning process that is trying to collectively and collaboratively develop complex solutions, changes and innovations to a more sustainable society in the economic, environmental and social dimensions.

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