[Discuss] OSHW & Economics

Wed Nov 20 04:10:34 UTC 2013

Mario - excellent job raising many good questions. I'm going to pick on one
that I believe is the root of your email:

> How the OSHW philosophy conciliates with the simple fact that the "makers"
> need something to eat at the end of the day?

This is the most common fallacy I hear. Said a different way: "OSHW sounds
great but what if I want to pay my bills?" The truth of the matter is that
OSHW will be more economically positive for makers in the long run.

Here's our product: https://www.sparkfun.com/products/11113 And here's a
"cloner", a.k.a someone doing cool stuff:
http://www.uctronics.com/arduino-pro-mini-atmega328-5v16m-mwc-avr328p-development-board-p-1694.html

And another - Us: https://www.sparkfun.com/products/10311 And someone else
doing good stuff:
http://item.taobao.com/item.htm?spm=a1z10.1.w5003-4372075591.1.T8CQqx&id=35666638194&scene=taobao_shop

This competition is a good thing. It makes any company *not be complacent*.
And in the modern global marketplace complacency is the quickest way to
death. I am flattered every time we're copied and I am thankful for it
because it prevents me from getting lazy and risking our business.

Do you think SparkFun has lost market share because these companies are
selling these products? The answer is no. In example #1 (no forum, no
contact info) we beat them with customer service. In example #2, we beat
them with the extra materials (compatible cables, curriculum).

Are we paying attention? We'd be fools not to. We've got products in the
pipeline to add new features to both of these products. We've got new
procedures to lower our cost of goods (labor, parts, testing time). We've
got new customer service and tech support initiatives to beat the
competition. We are innovating to keep the competition at bay.

The second most common fallacy associate with OSHW is confusing business
problems with open source problems. Can someone make your product for
cheaper? Someone else *can always* make your product cheaper than you
whether you are open or not. You choose 'Asian' manufacturers as your
example but this is bogus and borders on xenophobia. There are plenty of
companies all over the world that are better at manufacturing. It's your
job as a business to figure out how to either sell the surrounding benefits
(support, availability, quality, brand) or dedicate time to streamlining
your manufacturing processes to lower COGS. I recommend both. It's what
good, profitable businesses do.

Cheers,
-Nathan

-- 
Nathan Seidle
CEO, SparkFun Electronics Inc
Boulder, CO
Phone : 1-303-284-0979
Fax : 1-303-443-0048

On Tue, Nov 19, 2013 at 7:03 PM, Matt Maier <blueback09 at gmail.com> wrote:

>
> On Tue, Nov 19, 2013 at 6:27 PM, alicia <amgibb at gmail.com> wrote:
>
>> Consider the phrase "The future is already here, it's just not evenly
>> distributed." (by William Gibson in The Economist) That phrase implies the
>> problem is not with innovating tech but innovating distribution, be it
>> financial or geographical that is the real problem to conquer.
>>
>
> Paul Graham has a cogent explanation in one of his essays about how the
> "wealth gap" is actually pretty irrelevant. Relative poverty is nothing
> compared to actual poverty. A person might feel poor when they can't travel
> every holiday, but feeling hungry is an entirely different thing. The
> uneven distribution of nice-to-haves will always exist, but I think we can
> eliminate the uneven distribution of must-haves. The necessities of life
> don't really change and they are ripe for open sourcing, which lowers costs
> by orders of magnitude. Lower cost means that everyone can afford them.
> Everyone might not get spaceships, but everyone can get shoes.
>
>
>> I argued in my thesis on the Arduino that one (out of 4) of the reasons
>> it became popular was economical - it was cheaper than other
>> microcontrollers on the market, but the technology of microcontrollers
>> already existed. They made the microcontroller landscape better in more
>> than one, but the economic factor was definitely one of them.
>>
>> In terms of making sure oshw is being manufactured in good working
>> conditions, these are not IP concerns as much as business concerns. Any
>> company with patented hardware and closed source software can use labor in
>> acceptable or unacceptable ways, so I don't think the conversation centers
>> around oshw as much as it does around business and economy. I say this
>> purely as a thread of logic, not because I don't think stuff should be made
>> in terrible environments or that we should not discuss it. I am all about
>> happy shiny people holding hands, and I would and do pay more for products
>> produced in ways I like, but production lines drawn are not drawn between
>> open and closed source stuff.
>>
>
> People who have more of what they need are less at the mercy of abusive
> deals. Sort of a 'rising tide lifts all boats' situation. When the things
> necessary to live cost 10X or 100X or 1000X less the situation becomes much
> more "ideal" and everyone has the breathing room to act more rationally.
> Open source has a proven track record of making things less expensive and I
> think that will only continue as it's applied to more fundamental systems.
> When no one has to give up their future to get through the present problems
> like awful employment conditions will work themselves out.
>
>
>>
>> Also thanks for being respectful of other cultures. Be mindful that we
>> have people world-wide on this list.
>>
>> Cheers,
>> Alicia
>>
>>
>
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>
>
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