This is part of a serious of blogposts about the REMODEL programme at The Danish Design Centre

We have now stepped into Phase 4 of the REMODEL programme and have thereby reached the half-way marker. This brings the 10 Danish manufacturing companies, who are exploring new business strategies and models based on open source principles, to the level where they start to have an overview what it takes to go open and harness the full potential of inviting users and customers to join the community surrounding their product and to take an active, contributing role by becoming co-creators.

Up until now – in the first three phases of REMODEL – we have mostly been laying down the foundation for understanding what open source is and how it can potentially be applied to not only software and virtual products, but also on physical products and hardware. With this understanding more firmly in place it is now time to dig deeper and start imagining how the open source mechanisms can be applied concretely in business strategy of the companies’ products.

Phase 4 – Building community and your system map

In this 4th phase of the REMODEL program the companies started to lay the foundation for establishing a community around their product. First they mapped their existing eco-system of stakeholders – from users (or customers) to collaborators, partners and external influencers – before diving into re-imagining what the full scope of the “system” around their product needs to look like in order to potentially create and maintain a community of co-creators to boost innovation and product development. This is done through an exercise called “the system map” – developed by Nicola Morelli of Aalborg University – which helps map money flows, assets building, human resources needed and other critical factors the companies need to put efforts into facilitating (and engaging with), as well as how all these connect to each other. In essence, you visualize the apparatus needed to develop, manufacture and sell the product including all the elements and their interconnectedness. One key exercise we have added in the REMODEL program is then to subsequently identify which of these elements could be open sourced in order to optimize value creation. Here is an example of what that looks like:

What did we learn? Open sourcing hardware is complex

Major learnings are really starting to pour in from the work done by the 10 companies as they have reached this phase of the program. For instance, it is becoming more and more apparent that open sourcing hardware is much more complicated than open sourcing software. One on hand because these days most physical products comprise of several elements that are not physical, ie. services, software or other virtual elements that are essential to the application of the physical product but not directly a part of it. For instance online platforms, data streams and even services, which may just as well be opened. But does that this make the product itself open? Concretely, in the REMODEL program, we have included a reworked version the Open-o-meter tool, made by Jerémy Bonvoisin, NAME and NAME, which does a really good job at defining exactly what makes physical products open.

But it performs less well in dealing with these non-physical elements as mentioned before. This made it hard at first for several of the companies to identify firmly what they should open and how to do it. One company said: “We realized suddenly how the Open-o-meter is mostly for products and not services or channels,” and then continued: “However the mindset and approach it represented was pretty clear and we could use that to discuss more broadly what we could open both in hardware and non-hardware terms.”

The secret sauce? Not the open source bit, but rather the magic of building community

It is also becoming clear in the work of several of the companies that simply opening up single elements of the product does not actually contribute a lot of measurable increase in value creation. The real trick lies in the community building element of the business strategy; namely how to motivate users to engage with those open elements. The classic “build it and they will come”-principle only goes a little way in crafting a radically new business model. Instead it is the social design of the engagement that make up the secret sauce. This is also why the idea of making “system maps”, as briefly described above, makes a lot of sense because this exercise prompts the companies to consider the relationship between the opened elements and the users and actually design the interaction needed. For instance, what kind of channels or platforms need to be set up (or found elsewhere) to enable meaningful knowledge and idea exchange – and even concrete co-creation activities? And how do we get people to understand the opportunities now being made possible – and engage?

The system map exercise did a brilliant job in igniting creativity in this space. But that doesn’t mean it was easy. One company expressed it very bluntly:

“Honestly, the system map was a true pain in the ass in the beginning as we could not really make it work. Instead we tried to make some sketches on paper, and once they were done we tried again. Second time around it materialized!”. In general the system map was not only really helpful in talking through the different elements surrounding the product (and their interconnection), but it was also very useful to see where value actually appears in the system. Perhaps most importantly: All companies said how fun it was. In contrast to other similar exercises like the Business Models Canvas, which – while very useful in many ways and contexts – was rather quickly discarded in our early REMODEL tests with companies last year because it, quite frankly, was a bit of a drag to complete according to the companies. So kudos to Morelli and his team for making business strategy work playful and fun.

Here is an example of one of the early stage system maps made by one of the companies:

This has also opened up lots of discussion around value creation in the companies: What kind of value is it that the opening of certain (or all) elements can yield? Profit is of course one of the ways the value of any business model can be measured, but is direct increase in turnover the most attractive value a new business model can create? For instance, if you have to balance the cost of creating a stable and active community of, say, a thousand highly competent co-creators against the direct profit it will create in short term will probably not be lucrative. But the subsequent increase in innovation pace, boost in competitiveness and the direct relationship with your core customers in order to learn about their needs and habits in real-time might present something far more valuable. Also in terms of profits down the line. So value really can be measured in many other ways. We’ll get back to that later.

Overall we have now started to get our fingers dirty and are really excited to dive into the challenges of opening up manufacturing and harnessing the business value of open source hardware. Stay tuned for next week!

This is the third blog post of the REMODEL programme. Read number one and number two here.

Learn more

Curious to follow the REMODEL program in more depth? Read more here or sign up for the newsletter. Eager to discuss? Join the conversation on Twitter under the #remodelDK hashtag or contact Danish Design Centre Programme Director Christian Villum on [email protected]

Originally published in danskdesigncenter.dk

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This is part of a serious of blogposts about the REMODEL programme at The Danish Design Centre

The first three work packages of the REMODEL design sprint – which we call phases – took the companies from having little or no prior knowledge of the concept of open source towards discovering and understanding the basic principles as well as prompted them to start to imagine how that could be used in their own business.

Could the open sourcing of enzyme research in Novozymes or outdoor furniture from OUT-SIDER accelerate innovation? Could open sourcing parts of Grundfos’ water pump systems or TagTomat’s urban systems open up brand new markets? These and many more questions were on the table as the ten companies got ready to dive into the REMODEL programme.

Phase 1: Discovering open source

The companies started out by learning the basics of open source principles by getting insights into some successful manufacturing companies who apply open principles already – in varying degrees. We used Tesla to exemplify a company which is only slightly open (and not open source by definition). Then we used OpenDesk as an example of a company which is partially open, and finally, we used Ultimaker to highlight how it works when a company is almost fully open.

These examples showed how going open can make up the foundation of a financially sustainable business strategy in different ways, as well as highlighted how being less open can actually limit a great business potential. This caused some very interesting discussions in many of the companies.

Phase 2: Imagining going open

In the second week, the companies started diving into imagining what it would look like if they were to open source a product from their existing portfolio (or parts/elements of it). They also started looking into and selecting who their most important users are, through user stories, and, more importantly, started envisioning what might motivate these users to engage with their potentially open product in order to become co-creators. An interesting side bonus, unrelated to the open source theme, was that several of the companies explained how there were actually disagreements about which segments make up the companies key target audiences. So this provided a good opportunity to discuss some very basic tenets of the business foundation – as well to align around them.

Phase 3: Visualising user journeys

Next, they started transforming one of their key user stories into more detailed storyboards that described the kind of interaction this user would have with the now open product. They also started to identify key elements in that interaction and discussed how to open some of these elements (for instance designs, data, documentation, etc.). These open key elements work as cornerstones in open business models and are the assets which communities of co-creators can potentially engage.

What have we learned from following the companies on their journeys through this first third of the REMODEL programme? It is still early stage, but already now (even before we have even gotten really deep into the realm of user testing, community building and more complex issues like licenses) that opening up products can be a little complex. However across the board of companies spirits are high; maybe even higher than at the outset of the programme: It is clear that they are starting to get a glimpse of the immense power embedded in creating the kind of radical user involvement and co-creation that open sourcing allows.

Stay tuned for the coming updates as the companies dive deeper into the intricacies of opening their products and building new business models for the Internet-age.

This is the second blog post of the REMODEL programme. Read the first one here.

Learn more

Curious to follow the REMODEL program in more depth? Read more here or sign up for the newsletter. Eager to discuss? Join the conversation on Twitter under the #remodelDK hashtag or contact Danish Design Centre Programme Director Christian Villum on [email protected]

Originally published in danskdesigncenter.dk

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Christian Villum: Giants such as Google and IBM have lately been followed by Canadian D-Wave, the leading developer of quantum computers, which opened up parts of their platform in January. But it’s not just the large, financially strong American technology companies who are painting the picture of open source as a global megatrend. Start-ups and small to medium-sized companies all over the world, and not just within the tech industry, are creating new and exciting open source-based physical products. 3D Robotics, Arduino and the British furniture company Open Desk, which is creating open design furniture in collaboration with 600 furniture creators all over the world, are just a few examples of how open source has become the foundation of some of the most innovative and interesting business models of our time.

Danish Design Centre has dived into this trend for the past year; a trend which is part of a large wave of technological disruption and digitization and which is currently top of mind for many companies. How do you get started with digitizing your business model, and how do you know if open source manufacturing is the future of your company? These questions aren’t easy to answer.

Growth programme for curious Danish production companies

This is why we, in collaboration with a range of partners, have initiated REMODEL, which is a growth programme for Danish manufacturing companies who wish to explore and develop new business models based on open-source principles, and which are tailor-made to fit their industry and their specific situation. REMODEL demystifies a complex concept and helps the company develop economically sustainable business models which can open op new markets and new economies.

We do this by using strategic design tools, which make up the foundation of the programme, and which are based on strong design virtues such as iterative experimentation, the development of rapid prototypes and most importantly, focusing on the needs of the end-user. On top of this, REMODEL also involves a global panel of experts, CEOs and researchers within the field of open source, which allows the programme to pull on expertise from some of the world’s most visionary innovators.

Timeline for the programme

REMODEL consists of a series of design-driven stages. Last year the programme was launched in a testing phase in which the Danish Design Centre collaborated with a handful of Danish manufacturing companies, including renowned hifi-manufacturing company Bang & Olufsen, who went through early modules of the programme over the course of the spring 2017. These modules were reiterated along the way based on the feedback from those tests.

The key learnings from these test as well as workshops with members of the expert panel then became the foundation for the official REMODEL programme, which launched on February 5, 2018, and where 10 pioneering companies are currently working their way through the programme, which has been set up as an 8 week design sprint. The outcome is for them to have gained a thorough strategic understand of the concept of open source hardware as it relates to their industry and furthermore a draft strategy to open one of the existing products in their portfolio.

Radical sharing of knowledge

Learnings, tools and methods from both the test runs and the main programme will be collected and shared in a REMODEL open source hardware business model toolkit, which will be freely available after the program.

On top of this we will be organising a REMODEL knowledge sharing summit in October 2018, where participating companies, the international expert panel, prominent speakers and anyone else who are interested are invited to Denmark to share their experiences and think about the next steps for open sourced-based business models and strategies for manufacture companies.

Discussing REMODEL internationally

In March 2018, Danish Design Centre is yet again participating in the world’s largest technology event, SXSW Interactive, in Austin, Texas. We have been invited to host a panel debate as part of the official schedule under the title ‘Open Source Innovation: The Internet on Your Team‘, where speakers from Bang & Olufsen, Thürmer Tools and Wikifactory will discuss the topic in general as well as tell stories from the REMODEL program.

Learn more

Curious to follow the REMODEL program in more depth? Read more here or sign up for the newsletter. Eager to discuss? Join the conversation on Twitter under the #remodelDK hashtag or contact Danish Design Centre Programme Director Christian Villum on [email protected]

Originally published in danskdesigncenter.dk

Lead image: Open Desk builds furniture as open design. (c) Rory Gardiner

Text image: CC-BY-NC Agnete Schlichtkrull

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Wolfgang Hoeschele: The energy infrastructure that we inherited from the 20th century is one dominated by fossil fuels and uranium, mined in relatively few localities in the world. The distribution and refining of these fuels is tightly held by a few large corporations. Electricity generation typically occurs in plants that hold local or regional monopolies, with vast profit potential. While gasoline is burned in millions of vehicles, the distribution system remains within the control of a few corporations, which often have regional or national oligopoly or monopoly control. The environmental impacts of the energy industry are staggering. It is high time for change.

On the positive side, the need for change to a 21st century energy system based on renewable sources of energy is widely recognized, the necessary technologies exist (and are often cheaper than conventional forms of energy provision), and considerable progress has been made. We can build locally-based renewable energy infrastructures. Renewable energy from the sun, wind, water, organic waste, and geothermal heat can be found everywhere on the planet. Hence, every city and town can make use of available renewable energy sources that offer economic opportunity and enhance resilience in the face of global economic crises and environmental change. On a regional level, localities can exchange energy in order to even out seasonal or daily imbalances in supply and demand.

A locally based vision of renewable energy generation could eliminate global- or national-level domination of the energy infrastructure by a few large players, and thus the concentration of profits in the hands of a very few. It could also reduce our greenhouse gas emissions to very low levels, comparable to the emissions before the industrial revolution. But the local orientation alone would not ensure that the benefits would be shared among all sectors of the local population, and therefore it would not guarantee widespread and active support. This is where sharing solutions come in. Shared energy infrastructure means that people together own and operate both the distributed energy generation facilities and the infrastructure to deliver that energy from where it is generated to where it is used.

In a sharing vision of a local renewable energy system, many households will generate their own renewable energy (as in solar photovoltaic or solar thermal systems on their rooftops), but many more, for whom this is not an option, will share in the ownership and operation of off-site renewable energy generation infrastructure such as wind turbines. The distribution systems by which energy is delivered to households will belong to cooperatives, municipalities, or trusts that are accountable to their customers and therefore do not take advantage of the potential of supply monopolies to generate economic rents (unearned income, extraordinary profits). The energy infrastructure is built by companies controlled by their employees, ensuring equitable sharing of the economic benefits. The construction and maintenance of this entire infrastructure is financed in such a way that it benefits the producers and consumers (and often prosumers — people who both produce and consume what they produce), rather than simply providing growth opportunities for the finance “industry.” Consumers use their buying power to ensure that they obtain renewable energy that is produced under fair conditions.

All the elements of this locally-based, sharing vision of a renewable energy infrastructure already exist. Some have even been brought to considerable scale, as for example in Denmark, where a large proportion of the wind energy generation is accomplished by local wind cooperatives. The challenge is to bring all these elements together into mutually supportive networks, and to establish such networks essentially everywhere.

In many countries, much of the grid is owned by municipal authorities, which is an excellent solution as long as democratic accountability of these authorities is ensured. Unfortunately, there has been a trend in recent years to privatize electric distribution grids, on the basis of the argument that private control is automatically more “efficient.” However, this argument is only valid if there is true market competition, which is not the case in most energy distribution systems.

In this context, the best way to ensure that a business serves its customers is for the customers to take over the business. There are different models to do this: in rural areas — as in much of the U.S. — rural electric cooperatives have long played a large role in running the local grids. In large urban areas, however, this model has not been as successful. At the urban scale, municipal ownership or trusts are more prevalent.

Finally, it is important that the workers installing all this equipment get a good deal — and this works best if they themselves own their own companies and make the important decisions. The challenge now is to bring all these elements together and help them to grow, in order to build an energy infrastructure that allows all of us to live well, while ensuring good living conditions for all the other species on this planet.

The post The Case for Local, Community-led Sustainable Energy Programs appeared first on P2P Foundation.

Wolfgang Hoeschele: The establishment of a carbon-neutral energy system requires massive investments in infrastructure such as wind turbines. Because distributed energy systems do not fit the business models of the old energy utilities, they continue to invest far too little in this sector. Meanwhile, many individual electric power consumers are interested in investing in renewable power infrastructure, but these investments are too large and require a level of expertise too advanced for individual households to be able to support them. How can consumers take matters into their own hands?

Wind cooperatives allow multiple households to pool their funds to collectively build one or more wind turbines. As co-owners, they make investment decisions and negotiate the terms with operators of larger electric networks. An urban example of this is the Middelgrunden Wind Turbine Cooperative, formed in 1997, which partnered with the Copenhagen municipal utility to build 20 wind turbines of 2MW capacity each, off the shore of Copenhagen. Københavns Energi, the municipal partner, has since then merged with several other companies to form the private energy company DONG Energy. The cooperative owns 10 of the turbines, while the other 10 are owned by DONG Energy. Over 8,500 people who mostly live in or around Copenhagen own the 40,500 shares of the co-op. The cooperative is organized as a partnership, and each partner has one vote, regardless of the number of shares. One wind turbine is a “children’s wind turbine” — shareholders have had their children vote on their behalf and thereby participate in the decision-making process, learning how to organize a sustainable future as cooperation between people.

The cooperative benefits from the support of the Danish association of owners of wind turbines (founded in 1978 as Danske Vindkraftvaerker, later renamed Danmarks Vindmølleforening). This association has successfully lobbied the national government to create favorable conditions for the expansion of wind energy. In part due to its activities, cooperatives accounted for around 50 percent of Danish installed wind energy capacity in the 1980s to early 1990s, and 20 percent of installed capacity today.

Results:

• The wind turbines were completed by 2001, and the output of the cooperative’s turbines has been varying from 40-45,000 MWh in the last several years.

• This is one of many examples in Denmark of wind power being produced as a result of the collective efforts of individuals interested in wind power.

• There is high public support for wind power in Denmark, due in no small part to the fact that ordinary people, not just some distant shareholders, are direct beneficiaries.

Additional Resources:

FEASTA report on Denmark’s wind cooperatives

Middelgrunden cooperative bylaws

English translation of Danish Promotion of Renewable Energy Act of 2008

This piece is an excerpt from Shareable’s upcoming book, “Sharing Cities: Activating the Urban Commons.” Keep an eye out for the public release of the book this summer. 

Photo by Stephen Braund

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