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13 Open Source Hardware Companies Make $1+ Million
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."
That's great and all but how much profit are they making on that $50 million in revenue?
RAM, blu-ray, LTO backup tapes, WiFi and others
in all cases many companies come together, pool their patents to create a standard and share the profits since every product sold puts money into the industry pool to be doled out to its members. The model even predates Linux, since that's how VCR's were sold. the profits go back into research that is pooled into another patent pool for the next generation product.
Not counterintutive for anybody who is, well... a little bit older. There. Said it. Now that that's out of the way, let us hearken to the days when TV sets had SCHEMATIC DIAGRAMS printed on the inside of the box. This was so that guys called "repair men" could actually fix these "valuable devices". Furthermore, while most consumers couldn't tell heads or tails from the schematics, they could at least unplug the tubes and take them to the drugstore and test them, to see if it was as simple as a worn-out tube.
No, I'm not that old. I was a little kid when all this was still going on, and even then it was fading fast. Still though, I have vivid memories of it all. It made quite an early impression on my budding geek mind.
If computer hardware gets back to that, it would be a welcome regression to the mean. Throughout most of history, you could generally understand most of the components in a device, or at least understand the relationships between the black boxes well enough to make repairs.
Anyway, the companies that made these "open source" devices throughout history did just fine. They prospered because most people don't have time to understand a schematic or source and integrate all the parts themselves. They'd rather pay somebody else to do that.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
...what in the HELL is with these comments? A lot of these people either seem to have their heads up their asses, or are just jerks.
Sure, a million bucks isn't a lot of money in the grand scheme of things, and may not be huge by small business standards... But for fuck's sake people, we're talking about companies consisting of-- on average --just a couple of people. People JUST LIKE US. In fact, they ARE some of us! If YOU made a million dollars in a year, wouldn't it be a pretty big deal?
With the world economy in the toilet and still goin' round an' round, tiny companies like these making decent money selling open source gadgets and whatnot IS a big deal.
Yes, revenue isn't profit, as many have pointed out. But I'll bet you anything, these people are doing fine, which isn't exactly something we can all say, now is it? Sparkfun? Sure, they're not really tiny like the rest, they have facilities and staff and all that, but still... Wanna know how they're doing? They gave away $100,000 worth of free stuff a while back, and I'll bet everyone's still got their jobs and can afford to eat.
These are people just like us, and they're pioneering the new way to design, manufacture, and sell electronics. Opensource hardware is even going to change the consumer side of the equation. Making people smarter about the things they buy, and making the consumer take up a more participatory role. It's another step in the democratization of technology.
Here's hoping we bring up the next generation wanting to build and create more things than they buy off the shelf. And here's hoping my name will show up in a similar presentation in the not-too-distant future!
Friend: "The NIC is misconfigured..." Me: "No prob, I'll just telnet in and fix it." *Silence*
My parents do about $750,000, maybe more, in sales per year in their small business. However they still aren't making a profit. Their expenses are eating it all up. They aren't millionaires and will never become ones this way, despite having sales near a million a year. Business isn't cheap to do. Whatever you think a business should be getting in profits, you have to figure their revenues have to be at least double that, usually much more. For example GE has $154 BILLION in revenues, yet makes only $10 Billion in terms of income available to common.
Doing a million in sales isn't hard. As I said, my parents near that and they have a small business that more or less sells just to a small tourist city in Canada. Making a million in profit, that's much harder.