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How do you make money with Open Hardware?

Protei 011.1 test in Lamma Island Hong Kong
Photo by Meng Lau [blacksheep.com.hk] Cesar Harada, holding Protei 011.1 in Lamma Island, Hong Kong.

I should say as a preface is that I am far from being rich (in money) but I am rich in ideas about how one can make money from Open Hardware. Just a few minutes ago I sent this email to an academic friend of mine who is trying to convince his senior University staff how Open Hardware can be profitable. I am sharing this for myself as research note, but also because it might help other people doing Open Hardware work to explain what they do, and how they might sustain it. The technology I am commenting about is Protei, the Open Hardware, Shape-Shifting Sailing robot to explore and protect the ocean.

A/ how you make your profit based on open source hardware and software?

On top of my head writing in the MTR (Hong Kong train system) I can give you a few short term ways to profit from an open source technology.

Open Hardware does not mean free :

  1. We make and sell boats. Either on demand, small scale, middle or large scale manufacturing
  2. We can operate boats and replace multi-million operations
  3. We can sale software, on the boats and server side
  4. We sell services at sea (communication, sampling etc)
  5. We collect data that we can sell
  6. We can analyze data and sell that to policy makers or other labs
  7. We can do consulting work to improve other boats
  8. We keep inventing new things thanks to the community inspiration
  9. We get money from donations because people understand this is an amazing technology and what it does for the world
  10. We get funding from private sources, like sponsorship
  11. We get funding from the public state, because we do it for the general interest
  12. We get to teach about the new tech
  13. Oh! … And we can get paid to do the research :)

On the long term open source could mean that other people fork your technology – transforming your technology / product into a market.
Product -> Market. So suddenly you would benefit from people improving on your work, and you can improve of theirs.

I like to think about it this way :
You can become a leader by taking an unfair advantage and keeping it
You stay a leader by fairly inviting everyone to enjoy the advantage you found.

So it is not about developing a cool technology but also about building a vibrant community around the technology. In fact even if you started it, the community will overtake the technology and make it its own. That is particularly true about science and innovation. The more people would cite you, extend your work, improve it the more valuable you will be recognize as the source.
In the industrial context the more people copy, the more influence. The history of Arduino is a great example of that, now you can find hundreds of copycat, their brand is thriving more than ever. Your competition becomes essentially your best advertising. And they automatically become part of your community and you can learn from their improvement. It is not about control, it is about having access and making sense of the information. Building the intelligence nexus, is how you stay the leader in your area. We cannot control the boat makers, but we can become the resource where everyone goes to, and share their improvements and new ideas.

Two closing references

And, yeah, let’s explore and protect the oceans with Open Technologies!

Association pour le Progrés du Management APM Marseille, France

A few days ago, I was lucky to be invited to speak in front of about 3000 leaders at the bi-annual APM gathering in Marseille on the topic “Renaissance & Entrepreneurship, New Ways». The organization was seamless, the stage and screens gigantic, the audience smart and enthusiastic. I loved it. I was there as a young tech / green entrepreneur using innovative methods to reach an international audience. I was honored to share the stage with amazing intellectuals such as Jacques Attali, Serge Soudoplatoff, Pierre-Marie Lledo, Axel Kahn, Florence Servan-Schreiber, Cynthia_Fleury, Jean-Francois Noubel and more.
My 3 key themes were :

  1. Innovation, the shape shifting hull and modular sailing drone
  2. Open Hardware for the Environment, inviting company leaders to change how they approach intellectual property
  3. Global collaboration, to solve world pressing problems

I presented more than 200 slides with many videos and several people asked me to post my presentations : they are below. You can flick through the slides and simply click the links on connected articles / sources / videos.


Pleinière (12 minutes, ˜3000 people)


#1 Entreprendre pour l’environnement (45 minutes, ˜90 people)


#2 Crowd Sourcing (45 minutes, ˜90 people)


#3 Open hardware pour l’Environnement (45 minutes, ˜90 people)


#4 Océans espace d’Opportunités (45 minutes, ˜90 people)


I really enjoyed sharing my experience during this event, the many smart & difficult questions, the great conversations. I want to send a special thanks to Marc Tirel (for introduction), Fleurke Combier (from APM), Marion Chapsal (coach http://ideasonstage.com/) Yves Rajaud and all the workshop animators – you have been amazing. Also great thanks to my agent who has organized all the logistics of the event, the magic Lavin Agency.

It was my first time in Marseille, I loved the classic small yachts in the Vieux Port.
work in Marseille old port.

Even If I must admit, I did not take much time out of my hotel room :)
work in Marseille old port.

I will come again. The adventure continues!

Protei is recruiting 3 interns to explore and save the oceans

Protei, the Open Hardware, shape-shifting sailing robot,  is about to come out to the world.
We are looking to grow our team to take part into this great adventure.
We are looking for 3 smart, hard working good people  for

If you know people in Hong Kong, or people passionate about the oceans, robotics, Open Technologies for the Environment, please share – Thanks!

 

 

Protei by Cesar Harada on BBC Horizon 2013

http://youtu.be/UCvS2d9LYZY
This is a rough cut of the BBC program, keeping only what’s about Openness and Protei or Cesar Harada. Great thanks to Graham Strong, all the BBC team , Toni Nottebohm for allowing some of her material to be shared, all the Protei team in the video and Tom Higgs. Also below a related article.

http://osswatch.jiscinvolve.org/wp/2013/04/17/is-tomorrows-world-an-open-source-one/

Is Tomorrow’s World an Open Source one?

Last week BBC’s Horizon put out a special episode looking at the next generation of technological advances. Two of the stories they reported caught my eye as they suggest that the future of innovation lies in an open way of working.

Liz Bonnin Horizon BBC

Liz Bonnin presented the show from one of The Science Museum’s storage hangers. Photo Credit:BBC

The first story looked at the work of Professor Bob Langer at MIT.  Professor Langer has received the Draper Prize and National Medal of Science for his work in biomedical engineering.  Langer’s approach to research is to bring experts from a range of fields together to create an interdisciplinary team.

Previous approaches to designing medical devices were designed by doctors based on existing materials.  Langer sought to design new materials to operate inside the body and be safely absorbed once their job was done.  To make this possible he assembled a team including engineers, chemists, neurosurgeons, pharmacologists and a number of other disciplines.

The approach of applying one expert’s knowledge to the problem posed in another’s primary field has many parallels with open innovation, and led to advances never thought possible by those working in single fields.

The second story reported on the Protei project which we heard about recently at Open Source Junction.  Protei was founded by Cesar Harada, and seeks to produce sailing drones which can be used to clean up oil spills.

Harada released his initial designs online and set out forming a community of scientists and engineers to collaborate on the project. Supported by a kickstarter campaign, over $33,000 dollars were raised allowing him to hire a work shop and invite his community to work together on the open hardware project.

The programme then focused on the contrast between the model of inventors patenting an invention which Harada characterised as “good for the manufacturer but not very good for the people”, to the “new culture of openness” shaping what we invent.

One comment that piqued my interest came from Gia Milinovich, who spoke of a “tension between the open source movement and business”, and a “battle between these two worlds”.  While this paints an exciting picture for a science documentary, I think the language used here was slightly disingenuous.

While we hear of stories where one company attacks another company who backs an open source project, these bear little distinction from companies litigating against each other over issues with no relation to open source. It’s fortunately very rare that we see a “battle” between a business and an open source community, and the examples of this are greatly outstripped by the examples where the two work together in harmony, indeed furthering one another’s goals.

Designer Wayne Hemingway then described how he “loved the idea” of an environment with no patents and no copyright, which while certainly a valid goal doesn’t do well to represent the way open source works.  The most common open source licences all at least require that the the original author be credited for their work, which in a copyright-free world wouldn’t be enforceable.

These criticisms aside, It’s great to see open source and open hardware getting airtime from a mainstream broadcaster like this.

Towards an Open Hardware license for Marine Technologies

Open-hardware-H2O

Today I met with Andrew Katz, Intellectual property lawyer from the UK and notorious in the Open Hardware world.
Open-H2O is a community that “develops open technologies to explore and protect the oceans”, so naturally, as any technology generating organisation we need to define the terms, conditions and limitations attached to the technology we document and publish. We found that no existing license was covering our needs so I (Cesar Harada) have been working since 2010 (Open Hardware Summit where the Open Hardware License 1.0 was collectively edited) to refine the type of license that would allow us to work best together.  This will be version 1.0, when Open-H2O, Protei or anyone interested in making this license progress are ready to invest time, money or put work into this, we will develop it further versions. The other idea is also to contribute to the Open Hardware movement and community, proposing improvements and testing them. The functions of this new license would be multiple :

  • allow inventors, scientist, engineers, makers, to develop open technologies, making sure these technologies remain permanently open for environmental and social good, for commercial and non-commercial applications without royalties, commission or fixed / incremental license fee.
  • make sure that the author remains the author once licensed (correctly credited), but the technology becomes officially available to the world (documentation shared with the technology licensee = the community = Open-H2O website).
  • protect technology generated by the Open-H2O from potential legal attacks, fraud or abuse of the technology by other groups.
  • a common license to act as a currency, or common asset to both non-profit Open-H2O and corporation Protei INC to trade services and information. The license would then attract similar open technologies for the ocean and grow this community.

These are notes from our meeting to the address of the Open_H2O community scrutiny, before the next phase which will be to feedback on the draft of this licence Jan 4th 2013. If you want to have an input on the Open-H2O license, please do comment below before Jan 4th 2013.

The main amendments we have talked about so far are :

a. Extending the license from the DOCUMENTATION towards covering more of the TECHNOLOGY (overlapping with patent function). Regardless, the required documentation that comes with the technology needs to be listed. Documentation is key.

b. Exclusion of liability : specific to maritime use (location and legislation of international waters, underwater).

c. Trademark use : “this license does not grant use of a trademark policy” or such simple article should suffice – we would have a separate trademark policy. Practically that means that everyone can use the TECHNOLOGY but we can decide what is NAMED “Protei” (trademark). For instance drug dealers, or military may use the technology, we cannot oppose that use, but we want to be able to forbid them use our name with it. Having a control on the trademark can also allow us to control the allocation of serial numbers to technology versions and individual machines ie : Protei_010_00045 (Protei technology version 10, machine number 45) or Protei_20121218a (Protei machine completed the Dec 18th of 2012, defining state of the art).

d. ShareAlike : Anyone using the technology or documentation needs to license the work using our license Open Hardware H2O.

e. Ability to update the license : “GPL 2.0 or later” to allow users to have their license stay up to date, and permit administrator to improve the document without having to make user sign every time the changes in the terms and conditions.

I am already adding these suggestion for his consideration :

f. Environmental Clause : in case of loss of technological equipment at sea, the users / operators of the machines are fully responsible. Same if the machine is no longer consider a machine but marine litter, users / operators are still responsible of disposal / recycling.

g. Registered license : We love the model of Creative Commons license in which anyone can CHOOSE a license from the different options straight from the website. We want our license to be as easy to access, but we want them to be able to fill a similarly simple form, that we keep a record of. This way Open-H2O builds a REGISTRY of who is using the Open Hardware H2O license, the community grows, and we can more effectively protect them as they are also registered on our end, with a date, description and required documentation. This doesn’t have to be in the license, but can make the license a lot more effective in the case of litigation, Open-H2O supporting the licensee a little bit like the patent office would.

I am very looking forward form comments and feedback before Jan 4th.

Protei INC and Open H2O

Do you want to transform your idea into an Open Hardware Technology for the Environment? And why not into a business or a non-profit organisation? This is how we are doing it. I am not saying it is the best, but it is our preferred way.

General strategic motivations

In the last months, “Open_Sailing” changed name to become “Open-H2O” to cover a larger scope of interest, and “Protei” -that I started alone as a lab of Open-Sailing lab 2 years ago- is going from a purely research project to become a small industrial robotics startup as “Protei INC”. I want to step back and consider the history of the work over the last years, explain the deep transformations we are going through and what motivates our decisions today.

20121204Open_Sailing-- Open-H2O -- Protei.inc
http://www.flickr.com/photos/worldworldworld/8242257389/sizes/l/in/photostream/

On one side, we have Open-H2O a large non-profit focused on developing Open Technologies to explore and protect the oceans.
On the other side, we have Protei INC a small lean robotic start-up that is going to manufacture, distribute and support beta Protei products.

The separation of the 2 entities have been drafted a year ago here, but what follows is a description of that separation with more details. At the time, this idea of many small companies spawning from an inventors groups (such as squidlabs) or forum (such as instructables) was the most inspiring model.

Open Hardware for the Environment.  Open-H2O + Protei + other Invited Open Hardware projects for Water applications

There are many reasons why we are opting for 2 structures (instead of one hybrid) model to develop Open Hardware for the Environment. This is a big list of pros, and a short list of cons with examples from other companies from which we want to learn from, both in their successes and difficulties. But what I am mostly interested in here, are your comments to help us all improve. Based on your comments I might come back and edit these posts, adding references, better examples, adding paragraphs, correcting grammar and spelling, as this is part of my PhD research at Goldsmiths University in London.

This text goals are :

  1. For Open-H2O, Protei members and our partners to understand these transformations we are going through. It is necessary to explain why 2 entities are born of one, meant to live their own lives, yet to grow and support each other.
  2. To contribute to Open Hardware as a movement, on the questions of Entrepreneurship, document our story to encourage more and more cool projects to turn into resilient and flamboyant Open Hardware Tech Start ups all around the world.
  3. Open a discussion on what are the best strategies to develop structures for Open Hardware for the environment. The stake of this being how to turn the next industrial revolution into a civilisation shift that creates technology for the environment instead of destroying it.

Inventors, Makers, Hackers, Environmentalist, Researchers, Engineers, Students, Retired and active Professionals, Housewives/men, kids, hobbyist, you, ALL HANDS ON DECK.

Pros

Non-Profit Resilience & Risky Business

Separating the technology community (Open-H2O) and the manufacturing company (Protei INC) guarantees that even if the manufacturing company goes bankrupt, the community and the technology will continue to thrive for the environmental benefit. If a company fails using open hardware technology licensed by a non-profit, another company can be created by the same or other people. A good example of such resilience is DIY drones, a web community that spawned the wonderful  3D Robotics manufacturing group, the 2 entities having a robust symbiotic relationship with one another.

Research autonomy and Integrity

I have spent the last 8 years in different lab Environments (from art to science) in different countries, at post-graduate level either as a Student, Researcher, Project Leader, Professor Assistant and Invited lecturer. Many of the projects I have been involved at the University have been supported by external sponsors, often in related industries. I can say from experience that most sponsorship allowed us to work freely and produce independent research, but I can also say that several times the researcher freedom and autonomy, as well as the integrity of the research material produced has been altered by an unsuitable relationship between academia and industry. It is vital that research stays free from industrial and manufacturing constraints, as well as the industry needs to be able to meet its goals, often dictated by strict market imperatives and dynamics.

To my point of view, a positive civilisation progress has been achieved with the separation of the church and the state, that guarantees that a state will distinguish what is relevant of faith or reason. Similarly the separation of manufacturing and research is to bring significant benefits.

  • Open-H2O is for research, it produces ideas designs and prototypes. It is where diversity of non-converging arguments only creates more value to the community and the possible development of multiple technologies in a democratically-led organisation.
  • On the other Hand, Protei INC is for lean manufacturing of robots. It needs to be univocal, productive, focused and competitive. The corporation structure of the company would be identical the chain of manufacturing, a chain of command, optimised for production.

As you can see the 2 entities have radically different objectives and requirements, it made sense for us to separate the 2 activities, to have more research freedom on one side, and being more productive and profitable on the other side.

Open-H2O corporate structure
Open-H2O : research oriented, a hybrid of an academic structure and how the website/community services are deployed, each of us being responsible for one part of the website content.

Protei corporate structure
Protei INC corporate structure. Minimal 3 Board of director piloting all the manufacturing operations that might be generally sub-contracted to external manufacturers.

Cycles of Innovation

Industry has high security standards, Academia has publishing standards, initial research can be fast, many research projects take forever, some products are simple enough to be launched in a few days, some require years of costly R&D.

Protei_001, 002 and 003 were built by Cesar Harada alone in a garage in New Orleans in less than a month, costing respectively 400, 300 and 150 USD in raw materials. Protei_006 was built in Rotterdam by a team of ~10 brilliant engineers from all around the world over 3 months and costed about 25’000 Euros in raw materials, with a production budget of almost 60’000 Euros total if we include transport of the team and machines, food, stipend, insurance, rent of the factory, machines, testing sessions… The cost of developing a machine / technology / science experiment varies greatly and each researcher has his style and schedule. Cesar loves iterating fast with prototypes with methods inspired from experimental physics, some other people prefer to work a long time on the theory would they ever touch a tool in the workshop or go to the water. Both methods are valid for research and produce different outcomes.

Colllaborative dev Of Protei

http://www.flickr.com/photos/worldworldworld/6199968140/

I personally think it is acceptable to spend so much money and time on research because the whole of point of research is that the outcome is uncertain. The outcome of manufacturing is determined at the beginning of the manufacturing process.

A scientist would set up an experiment of which the expected outcome would be A, B or C, but is generally even more valuable is the outcome is D, opening to even more questions and possible outcomes. On the other hand, the manufacturers will need to validate A, B, C in a determined time and budget as part of an optimisation process. The research process opens up from a question, adding to the number of options ; manufacturing optimisation closes down the number of options, a deductive process towards an ideal product.

Practically speaking, we are talking about different profiles and personalities here, and some would draw there the  line between the scientist and the engineer : one that dreams, invents and explores and one that rationalise, optimise and produces. Some people can do both, some are much better at one than the other, but that’s what makes me believe the relationship between research (Opem-H2O) and industry (Protei INC) can be so fruitful, working at different speed with different methods or related subjects.

People management

In terms of “Community Management” (Open-H2O) and “Human Resources” (Protei INC), the structures are totally different. In Open-H2O, members have to tolerate their differences ; in Protei INC the manager needs to be able  to decide what is produced and for how much, by who, when, where and how (process). As the CEO of Protei INC I want to be able to decide who I work with, pay people to work on what I know is relevant for the company. As a researcher in Open-H2O I have to appreciate and learn from divergent opinions and theories.

My experience is that it is possible that an open source project would self-regulate itself if members have a common goal (having an influent leader and/or a strong and simple vision helps) but I found that many people attracted to “open source” projects tend to be really nice, open minded but undisciplined. That’s not always true, but generally true in my experience, and that gets more true if people are not paid, some will think they can do whatever they want and not tolerate any form of authority : open source does not mean anarchy. Open source projects needs moderation and often even smarter/more subtle management techniques and close follow up. One of my favourite talk dealing with managing an open source community : “Google I/O 2008 – Open Source Projects and Poisonous People” by Brian Fitzpatrick and Ben Collins-Sussman (Google 2008)

http://www.youtube.com/watch?v=-F-3E8pyjFo

Guarantee of Openness of the technology through Open Hardware H2O licensing

Having the IP licensed by a non-profit, guarantees the un-retractable openness of a technology. That means essentially being faithful to the community and the original founding ethical values.

A good example of this is the relation between the Mozilla Foundation (non-profit) and their main community generated product Firefox (free open source software). The Mozilla foundation being a non-profit guarantees that the code remains “eternally” open even if the commercial activities were to fail. Thousands of people continuously voluntarily contribute code understanding it is a collective effort for general interest.

A counter example would be recent events at Makerbot industries. Makerbot has been producing amazing open hardware 3d printers, but after significant external investors and functioning on heavier structural cost (adding admin, legal, machines, rent, salaries etc) making the machine “less hacker friendly, but more user friendly”, the price tag of the machine had to go up. Eventually another manufacturer entered the market announcing they would produce a copy-cat technology faster and cheaper. Not cool, not following “the [unspoken] rules of Open Hardware“. Makerbot industries had to close the source of the project, at the disappointment of many in the Open Hardware community. Being a respected brand and Open Hardware is great, but it might be more critical to be the best, fastest and cheapest in the market. I believe that’s made easier by separating the cost of research and manufacturing to prevent being step on by a vulgar copy cat cloner. We do not want that to happen to us, ever. To finish, I really want to give respects to the Makerbot team for all they’ve done for the movement, by linking to the response on the topic by Bre Pettis.

Cost, concurrence and niche markets

We have 2 main lessons to learn from the example above:

  1. Having too much overhead such as structural cost and investors expecting generous financial returns will increase the price tag of your devices, making us less competitive as our clients would have to pay for our shareholders/investors appetites, our rent, machines, staff, taxes, time of R&D, administrative, legal and web services. That’s why we want  to minimize investors, rent, machines, staff as they already exist outside of us : we are set to be a lean manufacturer by working with existing manufacturers – except for what is specific to your technology. Starting open and going closed is a process in which one may loose the trust of one’s community ; when you could (and probably should) have been growing at the same speed and powered by our community (ala DIY Drones + 3D robotics that operated like a small business and had -until recently- no external investors).
    In the context of exponentially accelerating technologies and under media pressure, we needs to make the choice to either step back into the closed “old world” of monopoly or, open even more our research on one side, and on the other side being extremely lean and adapt one’s strategy day after day, embracing concurrence, moving with whoever is the fastest and cheapest. If a technology is good, open source and well documented, it’s likely someone will duplicate this technology without any research and development overhead, to manufacture cheaper, faster and probably better. Allow everyone to enjoy the technology you are developing, but be the first to do so (more details in “Public and Private information : a question of timing” paragraph).
  2. Being a commercial manufacturing entity does not encourage a community of volunteer contributors to develop the technology, being a non-profit with environmental goals does (more). Investors do not make your technology progress as much as our community does : we must “feed” and nurture it, we are the community. It Is not tax free R&D, we will have to invest thousands of hours of our time supporting our community in time, money, intellectual and emotional support.

What will happen is that our community will become our main gateway for our clients (“prosumers“), technical support (forum), R&D, service providers, consultants and employees. Open Hardware enables you not only to develop a technology, to build a product, but a market, a community, contribute to a positive movement. It confirms the validity of the Long tail theory (Anderson 2004 ), fortifies a brand identity and structures a well connected and supportive community around your technology. It is a long term investment.

Public and Private information : a question of timing

  • Open-H2O is doing research, produce intellectual material, designs, prototypes and experiments. The information is published continuously and made open instantly as it happens, for general interest.
  • Protei optimises for manufacturing, and manufactures robots. It publishes manufacturing ” trade secrets” only the day the product is made available for sales on the market.

Why is that?

  • Open-H2O wants to be competitive on the knowledge market and guarantees so by publishing daily, remaining constantly at the very forefront of technology development.
  • Protei INC manufactures robots, that implies that between the time the machine is optimised and produced, a delay is created. This delay would allow a concurrent manufacturer -that already has the production chain in place- to bring to market Protei copycats faster, cheaper and probably better. The buyers would buy the concurrent robots earlier than Protei could sell its stock : all the overhead of Protei INC would be lost. Bankruptcy.

The necessary measures to counteract  this are simple :

  • At Open-H2O, all the development process of new technologies are immediately published and publicly available under the Open Hardware H2O License.
  • At Protei INC, all documentation is private until Protei INC products are released on the market with their full documentation.

That temporary “unfair advantage” of keeping manufacturing information secret until public release is the condition of Protei INC to survive and support the Open-H2O community.

Compatibility in funding and taxes

  • Open-H2O is developing a technology, namely Protei.
  • Protei INC is manufacturing products, Protei Robots.

So :

  • Anyone can use Protei technology for the benefit of the environment, that’s a work of general interest and therefore fullfils the mission of a non-profit.
  • On the other hand Protei INC manufacturing Protei robots is a commercial activity.

But the distinction between a Technology for general interest, and Protei as commercial product is what ultimately differentiate the non-profit Open-H2O and the profit Protei in the eye of the IRS (tax office).

  • It is right to say “Protei technology is developed by Open-H2O and Protei robots manufactured by Protei INC”.
  • It is NOT right to say “Protei robots are manufactured by Open-H2O and developed by Protei”.

Protei INC and Open-H2O are 2 entities that are very different legally and from a tax perspective.

A corporation is expected to make a profit that will certainly be taxed, a non-profit also needs to make money but must re-invest that money in activities which fullfil a mission the state approves as of general interest to the community.

Compatibility in sources of funding

Sources of typical income :

  • Open-H2O : small donations, large donation (philanthropy), Research Grant, Education programs, professional tax donation, sponsorship…
  • Protei INC : sales of robots, operations, data, environmental clean-up service, manufacturing grant, sponsorship, customer service, consulting, Investment…

Having 2 groups contributing under different aspects of the same technology allows the technology (in general) to receive a greater variety of sources of funding.

  • A C-corp (Protei INC) can donate tax-deductible money to a Non Profit (Open-H2O).
  • A non-profit (Open-H2O) cannot donate money to a Profit (Protei INC), BUT a non-profit definitely needs to buy things and services to exist, and operate.
We are in a transition phase, so this is in practice how we are going to operate until Open-H2O becomes fully independent and recognised non-profit  and tax exempt.

Protei and Open-H2O financial scenarios

Some people have been arguing that a B corp would be the hybrid we are looking for, but according to a recent article in The Economist “There is no tax advantage to being a B Corp, but there is to some of the new legal structures.”

  • Traditionally people are used to volunteer time, work and do tax-deductible donations to a non-profit.
  • And traditionally people are used to work for money, and pay taxes when interacting with a for-profit.

Instead of making a “suspicious hybrid”, I find it easier to conform to the way people are used to operate and simplify our relation to the tax office.

To avoid conflicts of interest between the 2 structures regarding decision-making and tax breaks, so it makes sense for me not to be directing both structures. I am the director of Protei INC, Gabriella Levine is the President of Open-H2O. In Open-H2O I will be directing the technology development, in Protei INC Gabriella Levine is the COO. In some instance we are not able to vote decisions that could present direct conflicts of interest between the 2 organisations.

Open Hardware for the Environment : a call.

Anyone reasonably informed today understands that we are going through a major cultural shift. Capitalism and logics of egoist accumulation have led to the destruction of the environment, and as the number of humans on earth does not cease to grow, worst case scenari beckons. The scale of environmental man-made damages suggests that we need to envision new scalable collective solutions. Everything humans do is a form of technology, so it is technology itself that needs to radically changed to revert the adverse effects on our environment. I propose this axiom to get closer to that “ideal paradigm” :

“If a technology is good for the environment, it should be made available for everyone to use, modify, distribute.”

That is simple enough to call for a volunteer action and establish a consensus among a group of individuals to work together towards a common objective.

The prospect of a shared prosperity with green open technologies

HSBC Campaign

A growing number of environmentalists and economists converge to say that “in the future, there will be no difference between waste and energy” (HSCB Advertising 2012). A practical example of this is seeing the Pacific Ocean Plastic Garbage patch as an enormous storage of energy. I have been quoted “if we had the power to create these problems, we may have the force to remediate these problems […] using natural forces to remediate man-made problems”. Using natural forces -as Protei does- is one thing, but harnessing collective intelligence and appetite for profit is another powerful one.

The idea really is to exploit capitalism and individual greed for environmental good. When I say that Open Hardware technologies allow us to “create markets, not products” or “turning product into markets” the idea is to create a “gold rush” on environmental problems. If we are capable of developing an oil spill cleaning technology or a plastic cleaning technology, AND we make it freely available, we hope to see many other companies exploiting our invention for environmental good.

And that’s where what many perceive as naivety becomes effective. Our license allows everyone to “use, modify, distribute” our technology for free at the condition to “credit the authors, and contribute the improvement to our community“. That means that any company improving our technology must share with us how they improved our technology. That means several good things :

  • our technology is improved
  • our community grows and everyone benefits from it
  • our brand grows (and we can control the naming/trademark and credits that go with it, see “Use of a traditional trademark, quality control authorship” paragraph.)
  • it is essentially free R&D for us, so the more people research, commercialise our technology, the more credit we get, confirming our position of experts in the field
  • we are constantly in contact with what other companies would call “concurrence“, that we can start to consider “collaboration” as they improve our technology.
  • the environment is the big winner if we are not (financially – if another manufacturers wins the preference of the consumer / community – that’s the risk we are willing to take)
  • We all make some money, support ourselves.

Many are skeptical of the potential commercial success of Open Hardware. If you consider the scale of issues such as the Pacific Ocean Garbage Patch as “demand” and what’s currently available as technological “offer” to solve that problem, you will soon see that our “Open Hardware for the Environment” technology has an enormous market potential. The environmental damage “demand” is a long way ahead of environmental remediation “offer”, and “Open Hardware for the Environment” is the intellectual property to bridge that gap, to scale a technology to that level. We could use that same logic for developing health solution as a clear subject of individual and general interest – yet, many people are dying to pharmaceutical lobbies financial interest, the same way we are destroying our environment to powerful energy, industrial, agricultural etc lobbies. I believe, this is changing too.

I personally think we are at pivot moment in human history, an enlightenment  : traditionally environmental issues where trusted to be best understood and addressed by non-profit (such as Greenpeace) academia and government. In recent years, many democratic countries have seen their large public enterprises privatised, public servants and politicians loosing credibility in corruption stories. Citizen do not trust anyone anymore and reclaim a democracy 2.0 that is real-time, transparent, accountable and to which they can democratically take part. As social inequalities grows and adequate natural resources shrink, the tension between governing and governed, rich and poor, responsible for climate change and victims of climate change increase, looking for a space of dialog. In a previous post, I explained how Open Hardware provides this neutral space for collaboration between Government and Citizen powered by Industries and Academia in the context of Brasil. I believe that this political pressure for affordable and transparent tools for transparent data will only amplify the growth of Open Hardware for the Environment as a market.

In 2010 Limor Fried and Philip Torrone presented “13 OPEN SOURCE HARDWARE COMPANIES MAKING $1 MILLION OR MORE (VIDEO)”

http://singularityhub.com/2010/05/10/13-open-source-hardware-companies-making-1-million-or-more-video/

That really is to me the demonstration that Open Hardware companies can not only survive, but really thrive serving common good. And that was 2010 : today in 2012 there are hundreds of Open Hardware companies making money and that number is exponentially growing.

A Common Order of Ethical Priority

Even if a non-profit (Open-H2O) and a corporation (Protei INC) may have divergent objectives and modes of operation, they can share a similar order of ethical priorities.

Protei Ethical order of Priorities

http://www.flickr.com/photos/worldworldworld/6199968270/in/photostream/

Most corporations today have this order of priority :

  1. Profit (money)
  2. Technology (closed IP and monopoly)
  3. People
  4. Environment (Nature)

This order of priority makes perfect sense for an industry that exploits the environment, instrumentalises people, using technology for profit. In that logic, Profit is what drives technological innovation, people are usually just treated as a disposable “human resource” and the environment is a marketing consideration, part of the “greenwashing” strategy to increase the price tag of the service or product. It is funnier/absurd if you consider that this is the opposite of how the world really works : Without the environment no human would live, no technology would be created, money being one of the most arbitrary and abstract of all technologies.
If we want to create an industry that works for the environment, we must flip the “business as usual” order of priorities on it’s head :

  1. Environment (Nature)
  2. People
  3. Technology (open IP and collaboration)
  4. Profit (money)

And I am not talking about a revolution here, I am talking about sustainability for business. A system that supports itself, that re-enforces how the world really works: by prioritising the environmental growth, we provide people a healthy life, to develop meaningful technologies and make money. That is a virtuous circle, a desirable state of affairs that I think is the shift human society needs to make to become truly sustainable and meaningful in the eyes of other species on this planet.

A different order of development priority

The choice we are making above could seem uniformly applicable to both manufacturing and research. Yet, research and manufacturing are such different contexts, the same order of priority does not result the same decisions in daily operations. We are in the process of developing Protei_010. Protei_010 has one simple hull, will be distributed with a basic RC kit, but the “toy” would be upgradable to become a powerful modular ocean science platform. Environmentalists would stress the development of environmental sensors -which are the finality of our technology- when the majority of our market target would require us to focus on providing the basic functionalities of transport -which is the mean-.

  • One to develop the end (measure) : the Why. Research. Sensing activities. The end questions. Open-H2O.
  • One to develop the mean (transport) : the How. Manufacturing. The transport. The means to answer. Prote INC.

20120719Protei_010%20architecture

Again, that really justifies why we need both. An organisation that proves my argument to be wrong may be the Public Laboratory to which I used to contribute to regularly. Public Laboratory is a non-profit that also sells Citizen Science kits. But to my knowledge, the largest part of PLOTS” revenue come from non-profit grants. Several successful Kickstarter campaigns show that this could change as they are truly developing a community by using crowd-funding platform to pre-sell their Open Hardware for the Environment kits. I personally want to situate the development of an environmental technology in the reckless but powerful reality of market and concurrence for Protei.

http://youtu.be/6lCUGPixEnk

A technology that was invented a century ago, that started coming out of  labs 25 years ago, became a toy with countless manufacturers for 2 decades reducing price, improving spectacularly specs are quadrocopters (or Quadrotor). Now the performance of quadrocopters are so high in comparison of their price, they are back to the lab to be tested in large numbers, serving now not the purpose of transport but as physical platform for  the most advanced swarm robotics and coordinated robotics experiments. Now imagine the same agility on the water, a fleet, a swarm of Protei… :) That’s when industry can really serve the research. Instead of spending decades developing Protei technology, we can develop it’s research and industrial applications simultaneously.

 

Why Shareholders cannot manage Protei INC, but why Open-H2O community must govern itself meritocratically

A normal C-corp would have the company owned by it’s shareholders. Typically shareholders invest money in the company because they are interested in maximising the company’s profit and their individual dividends. That is also called speculation, and because we want to subvert standard capitalist corporation functionning -namely a C-corp- we refuse to give away to our respected shareholders the capacity to maximise their dividends at the detriment of our ethical engagement that is to prioritise Environmental benefit, over people, over the technology. We want to see our environmental return grow faster than our financial return, that’s our success criteria.

In practical terms, that means that shares distributed by the company would not allow the shareholders to :

  • decide who the CEO is
  • manage the company and key decisions
  • decide how much dividend to allocate themselves.

These are the main “Exotic” conditions attached to the shares of Protei INC that guarantee the durability of our corporation for the betterment of the Environment. We can control the ethical engagement of a small number on the board of Directors ; we cannot control the financial behaviour of whoever decides to invest in the company, especially when that number grows, and when the volume of “external investors” outnumbers in volume the shares of the core team.

On the other hand, Open-H2O wants to be a meritocracy, that is democratically electing it’s representatives for a competitively renewed leadership for quality in research. Knowledge is produced mainly by 2 forces : collaboration and competition. In practice these 2 processes are not opposed but variants of one another as they are comparative processes, with a common goal : excellence.

I drafted below how such a system could work.

Incentivised Meritocracy for excellence in research. Open-H2O
http://www.flickr.com/photos/worldworldworld/8243812858/in/photostream

That is for research, now many other tasks such as web development, administrative, field work and more could be allocated budget using this system that is meritocratic.

Open Hardware H2O License

open hardware documentation
http://www.flickr.com/photos/worldworldworld/8244521061/in/photostream

A robust license acts as an”intellectual currency” to exchange “intellectual property” between Protei INC and Open-H2O. It is the license that both connects and differentiate Protei INC and Open-H2O, since Open_H2O will be developing a Technology in the non-profit world, while Protei INC would be manufacturing a Product in the commercial world.

The Open Hardware H2O is intended to invite anyone to use, modify or distribute Protei technology for free in exchange of crediting the authors and contributing to the Open_H2O community. Protei would be the first technology licensed under Open Hardware H2O but any technology that fulfils the mission of Open-H2O of “developing Open Technologies to explore and protect the oceans” would be eligible to that license and the support of the Open-H2O community.

This license should provide all the legal basics that an inventor that has a technology that he/she wants to  develop and licence as open hardware for the environment would want to see covered. So there is the IP specified above but also have a liability disclaimer in case of accident or misuse, environmental considerations and adaptations to specific rules that apply to the aquatic environment, especially in international waters. This license is currently under development and I will update this article when the first version of our license Open Hardware H2O license is released.

Use of a traditional trademark, quality control authorship

This may sound slightly strange but as much as we want to give away a lot of the control of who does what with the Protei technology, being able to modify and commercialise it, I reserve myself the right to decide what is “Protei” and what is not. As the original inventor of the technology, I recognise the contribution of the Open-H2O community to have contributed to the development of Protei. I invented the technology and the name, and I remain the owner of the trademark “Protei”, registered at the US Trademark office. I did not do this because I am a control freak, I do this for the integrity of the community and quality control of the work produced. Granting the name “Protei” to a prototype or product is a like a seal of approval, a quality label. I did not invent this, I learned it from Arduino.

arduino trademark
http://www.flickr.com/photos/worldworldworld/8239710957/in/photostream

To my point of view Arduino is the most powerful Open Hardware platform project to date, now available in every Radioshack and taught in art, design, robotics and science classes around the world.

Downsides

Now the downside of having 2 structures :

  • Confusion if you start like us, from one group that turns into 2, some people might feel they want to belong to both, but that may not be possible. It also means a clear redistribution of responsibilities  labor and titles must occur.
  • Administrative work : yes, it is twice the amount of paperwork at the beginning.
  • Legal work : the same lawyer for both entities or two separate ones? Really depends on your lawyer experience and your budget.
  • Structural cost : yes, it costs more to register and run, but to my point of view a lot cleaner.
  • Public and Private information : That theme overlaps a bit with conflicts of interest, as one may want to have both the up on research and manufacturing (ref. Public and Private information : a question of timing )
  • Community and employee overlap : potential conflicts of interest. And the political tension might grow if one or the other entity makes more money, but that’s human, and that’s called jealousy or greed.

Personal motivations

Beyond general strategic motivations, I also have personal motivations to be wanting to focus on Protei INC and less on Open-H2O for some time.
I used to spend 90% of my time prototyping and testing in the water, 10% to document. Since the project has become a collective effort, I spend 90% of my time managing the team and doing admin work, and 10% prototyping and testing in the water. The best sailing prototype today is still Protei_002 that I built alone for 150 USD alone in garage in New Orleans in 2010. I must get back to the workshop and to the water to make the technology and the community progress.

There is a lot of work ahead of us, but this is an incredibly exciting time. I hope you now understand better the mutations we are experiencing and it encourages you to build similar / better ventures! I have special thoughts here for our friends at OpenROV, Littlebits, OpenMaterials, windowfarms, safecast, PublicLab, OpenRelief  that are great sources of inspiration for us and that are totally taking off  as Open Hardware businesses : keep going guys! We’re coming too! Open Hardware for the Environment !

A man can save the world if the world can save a man

http://youtu.be/5ESWiBYdiN0

My friend and Fellow Salvatore Iaconesi was diagnosed with brain cancer. He made his medical data available and is getting self-motivated responses by doctors on a sunday.
I see this as a historical event, a turn in Public Health. I said PUBLIC Health legislation and practice. He says :

“I have a brain cancer.

Yesterday I went to get my digital medical records: I have to show them to many doctors.

Sadly they were in a closed, proprietary format and, thus, I could not open them using my computer, or send them in this format to all the people who could have saved my life.

I cracked them.

I opened them and converted the contents into open formats, so that I could share them with everyone.”

public health

A man can save the world if the world can save a man

Open Hardware for the Environment ~ PhD Thesis

Cesar Harada is currently candidate for a PhD, writing on  “Open Hardware for the Environment” at Goldsmiths University of London, Design & Environment department, under the supervision of Prof Jennifer Gabrys.
Protei, the International_Ocean_Station and Openet.org are the 3 main components of this research.

<Cesar> This page will host the abstract, table of content and link to the subpages of the thesis.
Research notes (+“PhD” tag), paragraphs, chapters, papers will be published on this website as blogposts and eventually compiled in a traditional academic format for journal publication and peer reviewing. I will often publish drafts posts, interact with comments and come back to edit/improve my posts. I intend to use a markup language I have developed in previous pieces of writing, I called AcademiXML (inspired from LaTeX and XML).</Cesar>

 


sticker-site

WORK IN PROGRESS

Abstract


Open Hardware for the Environment

Table of content / Outline

Introduction
Open Hardware for the Environment
Environmental Monitoring system
Protei
Open-H2O
International Ocean Station
Perspective
Appendix


Abstract

Open Hardware for the environment
Practice based investigation
Oceans as field
Approach : hands-on iterative, fast cycle innovation, bio-mimicry, Design & Artificial Selection.

Administration

Legal : Intellectual Property combination
Financial
Social
Psychological
Communication
Technology
Art : vision
Design : conditions
Engineering : means
Science : findings
Environmental Applications

Introduction

A practice-based part-time PhD.
Context
Cultural background.
Scope
What is at stakes : why we need Open Hardware to address Environmental issues today?
History of the mouvement  : the maker and the Environmentalist movement convergence.
Places & Cultures  : Northern America, South America, Europe, Africa, Middle East, Asia, Oceania.
Communities & Focuses : Social Networks, Energy, Water, Food, Sanitation, Transport…
Entrepreneurship & Non Profit Development : Sustainable business Development & Community Management strategies : networks, blocks, herds, nodes, wet networks…
Open Hardware Heros : Figures of the movement.
Open Hardware development strategies.
A research built around my personal investigation.

Personal Story and motivation

Father : Shinto, hands-on approach
Mother : Story telling, and social networks
Brother : Politics and ethics

Investigation Method : Hands on iterative method.

Art and Science : A thin line
Professional and amateur. 2 cults to the same god.
The tools of collaboration :
Internet x workshop
Social Media, influence, character building
Buzz words, branding and network of influence.
Environment monitoring and cleaning system
Protei + The International Ocean Station + Open-H2O Chapters

Experiences commented

== MIT ==
The urge to update a
method of investigation (hands-on iterative, thinking by prototyping and testing)
intellectual property (open Source)
financial (crow-funded)
technology thinking (shinto)
Revenue Model (profit + Non-profit)

== Gulf of Mexico ==
Experience
genesis of the project

== Japan ==
Goal
Method
Itinerary
Journey
Science
Sociology
COnclusion

== San Francisco, Summer 2012 ==

== Unreasonable at Sea ==


Experiences

Protei

Shape Shifting Sailing Robot to sense and clean the Ocean.
Motivation
Technology
Applications

International_Ocean_Station

Manned floating laboratory for Ocean Exploration.

Ocean Data Infrastructure & Open-H2O Community.

Ethics & Practical implications of running an Open Hardware project for the Environment

Process Notes

Going from a volunteer informal R&D group to a funded international non-profit community (Open-H2O) and a small manufacturing business (Protei.inc)
Savannah Ocean Exchange
2008 : Open-Sailing up
2009 : Open-Sailing Down after Ars Electronica
2010 : Open-Sailing up
2011 : Protei within Open-Sailing
2012 : Open-Sailing becomes Open-H2O
Open-H20 and Protei separates
Motivation to separate the community in a non-profit and for profit entity.

Topics

Intellectual property
Retail cost
Speed of development & Decision
Revenue model
Public Vs Private information and timing
License
On a thin line
Budgeting and prioritizing
Area of expertise
Network
Organisation structure
Ownership and Decision making process
Valuation and shares, capital
Value of the community
Growing social networks and the importance of social media for crowd sourcing
Crowd sourcing R&D and minimizing structural expense
Ethics, Accountancy and the Meritocratic model.
Ethics : 1. Environment, 2. People, 3. Technology, 4. Profit
Transparent accountancy
Meritocratic model
Lean Structure
Work items
Value allocation
Rating system

Towards a Consortium

Private (individual)
Corporates (companies)
Academic (universities)
Governmental (countries)
Intergovernmental (Agreements and international funds)

Conclusion : the need of open hardware technology

Future of Open Hardware for the Environment

Epilogue

Robodiversity
Social Architecture
Social Network and crowd funding
Controlling complex network with a minimum number of nodes
Research and Influence, qualitative and quantitative.

Bibliography

Author / Sources
Annexes / Downloads


 

References