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

The post REMODEL, week 4: What happened and what have we learned appeared first on P2P Foundation.

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

The post REMODEL: The first three weeks, what have we learned? appeared first on P2P Foundation.