13 Open Source Hardware Companies Make $1+ Million 149
kkleiner writes "Selling products whose design anyone can access, edit, or use on their own is pretty crazy. It's also good business. At the annual hacker conference Foo Camp East this year, Phillip Torrone and Limor Fried from Adafruit Industries gave a rapid fire five-minute presentation on thirteen companies with million+ dollar revenues from open source hardware. The thirteen add up to $50 million this year. While this business model is counter-intuitive for those accustomed to our current patent- and copyright-encrusted system, Torrone and Fried estimate that the industry will reach a billion dollars by 2015."
Don't see the growth... (Score:3, Interesting)
Re:Not counterintutive for anybody who is, well... (Score:3, Interesting)
They were that way because they could be. These days it just isn't useful or feasible. You still can get circuit diagrams and parts lists for some items, but generally there's no point. The reason is the complexity and density. ICs are a boon for electronics overall, but they are impossible to repair. If an IC dies, that's it, it's gone, you are screwed. Also the boards themselves are much harder to deal with. Surface mount electronics with extremely tiny spacing, multiple layers of traces, etc.
More or less, it is only feasible to diagnose large systems, which needs to schematic, or the few major discrete components, which also needs no schematic. I mean take my modern HDTV. Inside it you'd find a switching power supply that converted AC to DC, a circuit board with all the inputs and associated ICs to deal with them. Another with all the processing hardware, as the TV itself is a computer, and the LCD panel. The panel itself could potentially be opened up to access the backlights and the inverter for them. That's it.
Well, the panel itself, nothing can be done. A break on it and it is done. There is no way to repair it. The backlights and inverters would be easy to diagnose (assuming sufficient electronics knowledge) and probalby not all that hard to replace. The boards? Have to treat the whole board as a black box basically. If it fails, toss it and get another. The PSU is easy to diagnose as a unit, and could probalby even be opened up and diagnosed further though there'd be no reason, it is cheap.
That's what it comes down to. There just isn't much you can repair without simply locating the major dead subsystem and replacing it. Also all the stuff is pretty reliable. If it doesn't fail pretty quick due to a faulty solder joint or something it'll run for years and years, first thing to go would be the backlights probably.
So there's no point in a schematic, and more than there'd be a point for one in a computer. I don't need one to diagnose your problem, because what I'll do is track down the major components that had failed (ie the graphics card, or the stick of RAM, etc) and I'll have you order a replacement. You can't do any better than that in any reasonable fashion. There'd be no way to dig down on the motherboard and find out that, oh, it was this capacitor that lost too much capacitance and that caused this IC to stop working properly, and to then replace those parts. Just get a new board and call it good.
Re:Why $1B in 2015?? (Score:1, Interesting)
Growing from $50m to $1B in five years would mean that the market for open sources increases twentyfold in just five years. OSS has been around since the 80ies, OSS companies have been around since the nineties. So it took 15 years for the market to grow to $50m, why on earth should it increase twentyfold in just five measly years? Like many analysts, he is just making up numbers.
Not so fast. There are precedents, and it is worth looking at....
Apple Computer had about $100M in revenues in its first or second year. AND it was, by really any measure, a nearly open source hardware system. The assembly listing of the
'resident monitor' program was included, as well as schematics for the computer. This encouraged innovation on top of the Apple II platform, essentially growing the personal
computer industry in a few short years.
IBM had the same foresight with the PC. Open architecture, 3rd party , well documented processor, etc. Hence, the birth of the post Apple PC era. And this certainly grew to quite a few billion dollars.
So what is different?
In my experience (and in the experience of many customers and industry contacts), the web made engineers a LOT more stupid. Whereas once upon a time, you would
meet folks with current or growing experience in digital and analog electronics, physical prototyping, wire-wrap/solder/PCB design, assembly language, and all kinds
of other relevant cross-of-software-and-hardware skills, now everybody is a PHP junkie wanting to build the next great Face-My-Ass-Book for lots of eyeballs with a
monetizing proposition for a future equity-swap exit strategy......it's nonsense, and the marketing and advertising geeks have taken over the building.
I have a few customers in manufacturing and electronics who advertise for software engineers and computer folks. The clowns who show up for these interviews?
"I can build you a web site........I can click a checkbox to turn networking on and off.......I can sort of be productive at the level of a very very high level abstraction,
but if you actually make me consider how best to optimize this fixed precision algorithm, I am kind of useless....."
This doesn't happen once. One customer noted that for two positions on his engineering team, he got over 100 applicants with this half-baked
nonsense spewing out of them. Even though the to-be-hired position was well described to the applicants before the interviews......
We are, someday, going to regret this change in direction. We are going to get our lunch eaten for us. I was just amazed by reading an EE Times article (I have gotten :) and noting that largest semi fabs are abroad. Amazed. We don't do really big, cutting edge
EE Times for about 20 years, but stopped reading it.....just stocked it...
fabs here any more.
I say, the failure of new open source hardware will be because we really don't do hardware any more.....we kind of don't really do software of any real significance at the
scale we used to (web services, web SAAS, web porn, web docs, this is crap, it can make money, but it ain't really REALLY delving into bits and bytes).
30'ish years ago, when I first got into engineering, chips were a GREAT place for a career. Not so much any more, not in any great numbers.
That same time ago, low and high level code development was a GREAT place for a career. It's kind of mixed now, but low level, in this country, is really
on its back.
We just don't intellectually aspire much any more. So we will lose. Unless we change.
Perhaps a bit of history, true, but certainly a verifiable time-line.
These comments are missing the point (Score:2, Interesting)
Why is everyone comparing these OSH companies to huge international tech companies? These small upstarts aren't providing schematics for the next desktop CPU. They are simply selling kits and schematics for electronics/hacker/maker gadgets. This is the next evolution of Heathkits and Radio Shack's better days. These companies aren't really trying to compete with the giants of the tech industry. The purpose is to act as an enabler for tinkerers, hobbyists, and crafters.
After years of ignoring hobbyist electronics, I purchased an Arduino, an AVR programmer, and a breadboard with a 5v power supply (all from Adafruit). When I discovered the arduino community, i was hooked. The money I paid to Adafruit was, to me, a small amount to pay for a ticket to ride. While I was relearning the electronics basics, I tweaked the design of the 5v power supply with some different parts from Digikey. This led me into etching my own circuit boards, and building my own kit. When that first gadget fired up, it was like the feeling I got when I completed Linux From Scratch for the first time. I felt like a kid again. Please refrain from pointing and yelling, "NOOB!" I'm just an architect (not the software kind) who has reconnected with my nerdy past. I'm already working on designs for DIY versions of a CNC mill and CNC laser cutter. I'm going to do this because I've been inspired by the DIY community and the companies that cater to that community.
Seriously, do a bit of research of what these companies are offering. If you're not inspired by what people like Limor Fried from Adafruit are doing, then you need to turn in your geek card. I'm just a beginner in the DIY world, but this stuff is seriously fun. That these companies are making money (even if only enough to stay alive) is a win for the geek community.
Re:I gotta ask myself... (Score:4, Interesting)
hi, i'm phil, from the video. it wasn't clear that the OSHW movement is making money? the title of presentation and the post has an actual number in it.
i work for adafruit and make magazine - i don't think it makes sense to scan in each company's tax returns, but generally speaking... most/all the companies listed are making money. decent money, many full time employees, benefits, bonuses, profit sharing - great ROI, access to credit and VC. keep in mind they were very kind to share any revenue numbers and over the last couple years there has been a recession, yet all these companies have thrived.
OSHW should be celebrated here on /. - it's a dream come true and many of the people doing it are following their dreams.
it's too bad many of the people here do not have any aspirations "making" anything besides trolly comments on /.