How much is your thing worth?

by jpearce Jan 17, 2015
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I'm a simple guy, but the conclusion was the best for me...

As stated in the conclusion by Joshua M. Pearce1,2

1Department of Materials Science & Engineering, Michigan Technological University, Houghton, MI, USA
2Department of Electrical & Computer Engineering, Michigan Technological University, Houghton, MI, USA

"This paper successfully provided three methods of quantifying the value of free and open source hardware in order to provide economic justification for the support in FOSH development investment. The methods are rela-tively straight-forward to institute and are based on reliable freely-available data with minimal assumptions. The case study presented found millions of dollars of economic value from a relatively simple scientific device being released under open-licenses. This represents orders of magnitude increase in value from proprietary develop-ment. It is clear that FOSH development should be funded by organizations interested in maximizing return on public investments particularly in technologies associated with science, medicine and education."

Interesting, and your paper has (as of this momment) been viewed 294x at the link you provided and have your run it though your own formula because you have also listed your paper as creative commons.? I would assume the views as equivalent to a download for something someone would consume with only their eyes and brain.

But the problem that exists in all investment models is return on investment. If I'm investing in FOSH model, as a user, my return is my ability to use the product. What about other investors? What is their return? I don't understand that. Should there be a stock market for FOSH ideas? How would that be modeled? Who would be the market makers and clearing houses for those investments to ultimatly dole the funds out to the parties at most in need to advance the idea being invested in.

Ie, Simplify3d is a closed source, paid for slicer for the 3d printer modelers. Some say work better, some say works the same as the free version. While Simplify3d will constantly have an income stream because of purchases, the FOS slicers like Cura or Slic3r will be strictly reliant on donations. Donations that the average user, such as myself, may not be able to make or make very large.

So if there was some type of FOSH stock market, a % of those funds "invested" could be doled out to the FOS community projects and returns generated by -- ?

Also, What % of the items produced as a result of the FOSH market are actually items that should of been purchased? (ie, I saw a pill bottle scan based on Walgreen's pill bottles.. Isn't that under a patent still? ) Do we run the risk of causing problems that results in the criminalization or at least doesn't help the goals of the general maker, if we are printing items that are still under a copyright of some type.

But, It is interesting to think about and fun stuff to make.

Thank you for the detailed comments -- a lot of good points and questions.

Yes I think the same argument can be made for writing. When someone like Corry Doctorow posted Makers for free - http://craphound.com/makers/download/ -- He provided the world with a massive increase in value (and I know I still bought lots of copies to give as gifts). Academic articles are normally sold for $30 a read when purchased individually- so it is pretty easy to justify paying open access charges or at the very least posting pre-prints under the terms of the journal publishers contracts.

For hardware the investment model is easiest to see when seeing of the world through the eyes of an organization like the NIH or NSF. They spend millions of dollars a year on equipment for scientists - mostly locked down closed source tech. If even a small fraction of that money went to FOSH development that makes lower-cost high-quality replicable tools, the ROI would be enormous. We can make a similar argument for any government agency or professional society. That said - I think there is an ROI even for individual makers. If we use the syringe pump again. Yes it cost my lab a little extra time and money to go through the hassle of documenting and sharing the design. However, we have already been repaid -- Check out this improvement on the original pump design - http://www.appropedia.org/Lynch_open_source_syringe_pump_modifications The next time we print a battery of syringe pumps they will be better - because of others improving the design because we shared. I think a lot of makers think this way - and part of the reason why FOSH does so well on crowd funding sites.

I like your idea of a FOSH stock market - I need to think more about how that would play out and how you would set it up -- also lots of work done on an OS dividend that might be useful. Sensorica is also doing some really interesting work on trying to nail down an open value network.

Lastly, I think the vast majority of makers that are posting designs are posting their own - not copies of patented products. The patent system (which was the original open source -- after a 20 year monopoly) appears to be damaged to the point of being almost useless for this purpose. 20 years at today's rate of technological evolution is a sad joke. Patents have become lawyer documents instead of engineering documents. I know we never go to patents when we try to solve technical problems - only the literature -- and the same seems to be true in corporate labs (at many places they are even warned not to look at the patent literature as a precaution against patent lawsuits in the future -- think about how crazy that is!).

Well, I've looked at Sensorica and found their site disorienting. The Google docs mashup of how to possibly do something and no clear leadership. Maybe it was just me, but I still don't understand how the revenue stream works if you contribute to them. I understand the external market company sells the product but no laid out % vs time etc. But, I guess its attempt to self assemble a group to develop OSH and convert that back to a tangible value to the contributors. Then the ADHD kicked in and I fell off the internet...

I thought that patents were to protect the product from being used by others commercially? I thought you could still look up the information on a patent and still build your own item based on it as long as you didn't sell it or profit. I always assumed that was to protect the person that created it. (Edison, etc...) but the problem is when you have companies funding patent creators and they have various contracts in exchange for their salary, etc. Individuals that patent items do not do it to tie up the product and keep others from using it, but to protect themselves from theft of a revenue creating idea. But, I'll have to admit that this is just my perception as I'm not a patent (or any other) lawyer.

Regardless, lest we drag this farther than you or I may have intended and in an inappropriate forum, I did have one last observation. As a new explorer in the 3d printer universe, and trying to show my own family the potential, I think the REAL value in all of this is NOT the few hundred prints of camera phone cases, quad copter blades, or even the cost cutting FOSH research equipment. Instead I think it's the ability to have someone look at an idea and tinker with it and maybe improve it. The ability for an "undocumented engineer" to break the monopoly of higher learning by "accredited" institutions. I'm finding other sources of designs besides thingiverse, etc.. So if I downloaded files and build something and return it better to the world, there is benefit to the societies and these institutions did non benefit from the certification and documentation that they provide to those that follow a more traditional approach to life. Obviously they will not be abolished, but their own value may be less. ;)

I largely agree - except for one thing - there is no fair use clause for patents. So when something is under patent - you can't make it even for yourself - even to experiment on...It gets really stupid when you change jobs - having signed all your IP to the first company in exchange for your salary - you can not continue to work on a project at the second without a license agreement in place if it has been patented - even if it was 100% your idea (and in the case of some contracts even if you came up with the idea at home). Clearly the rules were not written with today's technology in mind. Luckily, the letter of the law is largely ignored and hopefully it will be changed to be more maker friendly soon.

On your last point - I think you are on to something. I have never seen more hostility towards a point during one of my students' thesis defenses when he pointed out that non-engineers could design products -- the anger came from a professional engineer and I think we have only seen the tip of the iceberg. Software tools still need to be developed to guarantee safety of product components or at the very least DIY tests for the prosumers....but there is a lot of products that are not critical only beginning to be checked off.