IP Obesity


Back in August of 2012 I was invited to give a talk at the local TEDx here in Boulder. Check the video or you can read the meat of my talk:

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Intellectual Property Obesity is what I have found to occur when a company relies too heavily on patents and enforcement rather than innovation. I believe strongly in open source hardware (OSHW) for a multitude of reasons, one of which is because OSHW helps prevent IP Obesity.

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Here's an interesting example. Kodak is an amazing company that has been in operation for over 130 years. In 1978 Kodak filed for a patent for an electronic still camera, the precursor to the digital photography industry. They had a 25 year head start on the industry. What did Kodak do? They licensed their patent and filed suit against other companies that possibly infringed upon it.

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A graph showing the stock value changes of two companies over the past 25 years. I'll let you guess who is Canon and who is Kodak. What happened? Kodak relied too much on their patents. They rested on their laurels and become intellectually unfit. They were afflicted by IP Obesity. What Kodak failed to realize is that regardless of patents:

If your idea is unique, easily copied, and can be sold for profit in a local market, it will be.

This is what I call the law of product derivatives. Well, almost - this is the sugar coated version.

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Unique ideas are not copied, any idea is copied. Snuggie has been knocked off. Yes really.

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It's not just digital goods like MP3s and movies that are copied, it's any idea. Checkout my new i9 cellular phone with dual SIM, resistive touch, phone complete with dual 0.3mega pixel cameras (yes, 640x480) and TV antenna (it actually has a pretty sweet TV app {it sort of works}). Did I mention I bought it for $35?

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You think only profitable ideas are copied? You crazy. Look at Instagram, the company that was purchased by Facebook for 1 billion dollars of paper money. Instragram was not profitable, they didn't have revenue, and yet how many apps have we seen that are JAIC (Just Another Instagram Clone)? Cloners are gunna clone regardless of your business plan.

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I apologize. This is the best picture I could muster to represent the internet. If you haven't seen it, the internet-map is pretty cool.

And if you think you won't be copied because competition is not in your backyard, you're wrong. The internet doesn't allow it. It's just as easy to sell something in Colorado as it is in South Africa. There are no local markets.

If your idea can be sold, it will be.

This is the true law of product derivatives.

Whoa. Ok, but that's what patents are for, right? I don't think they help much. Patents can cost $30,000 to $50,000. And the USPTO is so backed up you'll have to wait 3 to 5 years to even hear back on their decision. Ask yourself, how much does technology change in 5 years?

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This is a good moment to remind you that a US patent is only valid in the US. Sure, you can file for a patent in another country but I don't have the money, the time, or more importantly the stomach to litigate around the world.

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I realized when I started SparkFun that there had to be another path. Open Source Hardware was what I was looking for.

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You know I love OSHW, but it's really good for you as well!

  1. OSHW encourages people to share and learn from each other. I believe this is where humankind came from ("How did you prepare that duck? How did you make that chair?").
  2. A marketplace with more open source is better for the user. It promotes lower prices, more features, and better quality. Did I mention my i9 phone has a TV antenna? I doubt it will be a overwhelming feature but Apple certainly isn't offering it.
  3. OSHW makes companies focus on what they do best. If you make scissors you'd better focus on scissors because the competition is nipping at your heels. OSHW doesn't allow a company to stray into areas they cannot compete. It makes for more competitive, more fit industry.
  4. With an open industry, OSHW forces companies to innovate. If you're at the forefront of your industry if you're not trying to brainstorm the next big thing you will be quickly replaced by an open source company that is. OSHW doesn't allow you to sit still.

If your idea can be sold, it will be. So what are you going to do about it?

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Are you going to try to stop every seller on EBay that sells your stuff?

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Or are you going to try to create value that is harder to replicate?

Maybe you think I'm naive. Maybe you think an open source company can't be scaled above 150 people. That's fine, I'm sure patents will work for you.

http://dlnmh9ip6v2uc.cloudfront.net/newsimages/TEDx/SparkFun-Team-2012-M.jpg

But for myself, my 135 co-workers, 75 million dollars of sales, 600,000 customers and our 431 unpatented products wish you good luck.


Comments 98 comments

  • This is pretty much the same Open Source Sermon Nate usually gives, but every time I read it I’m proud to be a ‘Funion

    Here’s to drinking the kool-aid

    • I don’t disagree that Sparkfun is a great company, but they are going overboard with this idealogy hurting the real innovators, who are their customers. Sparkfun is a tools company. They assemble tools that other people/companies use to develop products. They are not affected by patent trolls since they don’t create innovative products that can be patented. If Sparkfun were to do a customer survey as to why their customers buy their products, they would likely find many entrepreneurs who need to acquire building blocks to make innovative products. Stop preaching about something you don’t understand. You may be bolstered by hobbyists, but not by those trying to make a living in electronics.

  • I agree completely. I design products for DAGU and we also have other Chinese firms copy our products. Recently we found a copy of our metal gripper being sold.

    Rather than try and fight things out in court we just upgraded our design to give it new features and improved the quality. Now we hope that customers would rather buy our new improved design and the cloner will be left with a product that is hard to sell.

    • You’ve got a lot of folks here at SparkFun who love DAGU!

      An excellent example. One could argue both companies are filling a need. You’re innovating and the other company is providing the original model for users who need it. They are the company selling replacement parts (old versions) if people need them.

  • I feel like a common thread between most successful OSHW companies is that they have low non-recurring engineering expenses invested in their “IP.” Most sparkfun products (maybe I’m wrong, but I can’t think of any examples) look like they took about ~1 engineer-week of time to design. So you design a new product and sell it in modest volumes at cost + some small profit margin. Sparkfun sells a couple thousand products (400+ which they designed), so their revenue isn’t super dependent on any one product, and their profit margins aren’t high enough to sustain competitors undercutting them on a small number of products.

    I work as a hardware engineer doing ASIC design. As an example, it might take ~20 people 4 years to design an ASIC, at an NRE cost of ~$20-30 million. You need to sell enough of your chips when you’re done to recoup that cost, and if you don’t, you don’t have a company. If we released the GDSII files for our chip and a competitor released a clone 4 months later (without incurring that ~$20 million development cost), our company would be out of business. It just seems like the business model is really hard to make work if you inherently have high NRE and need to recoup your costs with a reasonably high per-unit profit margin (leaving room for a competitor to undercut you buy selling it at cost + small profit margin).

    How would Sparkfun go about selling a product that cost ~$5 million in engineering/development work to produce? How would one apply an OSHW model in such a scenario?

  • Nate,

    I love what you do and generally enjoy your posts, but I have to say that this one is rather weak, mostly because your central example of Kodak is rather poorly chosen. I generally agree with your thesis in its broad assertions, to say that Kodak was killed by “IP Obesity” is a glib and shallow argument that overemphasizes the role of IP matters in Kodak’s fall and doesn’t really look past a few headlines in the business pages from the last several years.

    The “IP Obesity” in Kodak is much like Kaposi’s Sarcoma in a late-stage AIDS patient. That is to say that it’s not the root problem of Kodak’s woes, but more a symptom that arises because of a more fundamental underlying problem. Kodak’s rash of lawsuits against Apple, Research in Motion, Shutterfly and Samsung are happening now because Kodak has long since sold off pretty much all of its other lucrative assets, and the patents are about all they have left. “IP Obesity” in Kodak’s case is something of a “last gasp” symptom, one at the end of a long chain of deeper issues. Kodak’s digital camera patent had been snoozing in Kodak’s portfolio for decades while they fought to stay relevant in the age of digital photography. They bought Ofoto to make Kodak Gallery and turned out the “EasyShare” line of products, and didn’t bother suing anyone then.

    If Kodak were excessively reliant on any patents, the digital camera patent was not the one lethal to Kodak, but the more likely culprits were all the patents protecting their film and chemistry products. Kodak’s ultimate problem was that they could not conceive (or at least accept) of the notion of a world where nobody bothered to print out their photos. Unfortunately for Kodak, people are taking more photos now than ever with only a tiny fraction of them ever becoming something other than pixels on a screen.

    Don’t get me wrong. I love open source hardware and software and have benefitted greatly from both. I agree with the four reasons you state for loving OSHW. By way of agreement, I’d like to see a better example that enhances your message rather than undercutting it. I would think that a company like Rambus would be a better example of “IP Obesity”.

    • Wow! Thank you for the critical feedback. I would love a better example. I don’t know much about Rambus. Tell us more if you get the chance.

      I would however argue (cause I like to) that Kodak fell victim to IP Obesity regardless of the specific patent. When a company gets into the cycle of idea->patent->profit->innovate… it becomes dangerous. A patent can delay or hide the effects of a shifting market. I think your example of Kodak agrees with this (but correct me if I’m reaching). I believe Kodak was very innovative but in the early 1990s they couldn’t sense the winds of change and it stung them badly, possibly fatally.

      • Rambus is a company that specializes in memory technology. They got something of a bad rep around 1999 or 2000, back when PC133 SDRAM was the cutting edge of memory technology. Rambus had developed a memory interface that had some features that were interesting at the time, including delivering data on both the rising and falling edge of the bus clock, something that PC133 didn’t do at the time. Around this time DDR memory technology appeared, and Rambus sued several memory manufacturers. It looked particularly bad as RDRAM technology at the time had received criticism for being complicated and expensive and resulting in chips that ran hot and required extra heatsinking, as well as sacrificing too much latency. Some folks in the industry saw Rambus as being a patent troll.

        IB and Ben121 both make some very good points (I liked the Economist article IB cited) and whether we agree or disagree can be to some extent depend upon how we parse our arguments. That said, I tend to side with the notion that Kodak’s woes were mainly about failing to adapt to fundamental changes in the market, whether that defines IP Obesity or is better called something else. Definitely there’s no argument that eventually Kodak resorted to using patents basically as weapons when they had little else to keep them going. Unfortunately, I think this sort of thing is becoming increasingly standard practice. The harshest critics say this is what Rambus was doing, trying to use the patent system to slap competitors while pushing an inferior product. While not strictly in the hardware space, I worry that Oracle is doing the same thing in suing Google over Android technology.

        I also commend Ben121 for pointing out in Kodak’s defense their positive use of patents in supporting innovation. Another good example of patenting supporting innovation is the Stanford biotech patent on recombinant DNA, which helped pave the way for the biotech industry. The licensure of the technology helped spur the growth of the industry which could otherwise have been strangled in its crib in a free-for-all IP grab.

      • Nate,

        The antithesis to your point “idea->patent->profit->innovate” is that it is Apple’s strategy exactly. They create the tech. Lock it. Profit from it. Then Innovate again usually with the funds they just made. They have CREATED markets (or monopolies) out of thin air (GUI from Xerox,iPod,iPhone). An argument could have been made that minor underlying markets existed prior (commodores, Nokia Smartphones, low quality mp3 players), but they played the tech game right but unleashing products that worked, worked well, and worked reliably. Apple lives and dies buy it’s tech. If they stop innovating they will lose cash flow because their products (innovations) are fashionable and dispensable. They have to innovate every few years and release it, otherwise there is no reason to buy their product except as a replacement. The 100 Billion in cash proves their model is effective. This fact is compounded by them being the most profitable US company ever. Their model is closed source and their success warrants that this as an effective solution.

        Personally, I work in the Energy industry (Houston) and we see little innovation because of bullet proof safety standards and capital risk models. When lives are on the line you do not want to test out a new microcontroller (PLC) or a hardware device (Blow Out Preventer). Companies make their dollars on that reputation alone. So many devices are the exact same in terms of hardware, but what we buy is the reputation that it will never fail, cause if it does, we are dead (literally). The hardware is in a sense “OPEN” because every customer has the source (drawings, BOMS, etc) to every piece of equipment. If a part fails on a drilling rig, I know exactly where to go to replace that part in a matter of minutes regardless if the vendor will comply.

        I am/have been a supporter of OSHW and supported and attended (through my personal company) the first OSHW Conference back in the 2010. I wanted to meet you but was to nervous to introduce myself, and had to catch the train back to Albany. I think what you have created is not so much a model that supports OSHW, but rather your product is the knowledge and application itself (which is what OSHW literally is: knowledge). I use Sparkfun/OSHW everyday to not necessarily develop/sell OSHW products, or electronic devices, but I use OSHW to learn how to do the big things better.

        In turn I believe that innovation, regardless of the source (open or closed), is what wins markets. Apple wins because they are innovators. Google wins because they are innovators. Sparkfun wins because they are innovators. Makerbot wins because they are innovators. The list could go on and on. If you adopt a profitable business model that spurns innovation within your organization you will be successful. Anything less and I believe the business will go belly up. The energy industry is seeing this with all the new horizontal drilling stuff. 20 years ago no one cared. Now every has to have the technology to survive.

        Colin

      • Interesting Debate, and there is enough room in a cavern the size of Kodak for both arguments simultaneously.

        For review, when Kodak “invented” the digital camera, there were no color printers - zip zero, and color monitors had low resolution, curved surfaces, and 16 colors - it was less than self evident that the multi-billion dollar industry of photography would turn faster than guacamole from film to digital.

        Kodak’s reality till recently had been one of continual growth, and they used this to purchase patents - spurring innovation outside of Kodak as well as inside.

        But the flower is off the rose of growth, and Kodak can no longer afford to underwrite innovation in its industry; instead Fuji and HP have intruded into the business of printing color on paper via the Laser imager, and inkjet printer respectively, while canon, nikon & fuji fought for the camera end, leaving kodak without a dog in the fight. (That said the easyshare cameras win their sector, but Kodak isn’t a professional name anymore)

        I think OSHW would do really well to provide an alternative to Patents rather than condemning them outright, like a standard licensing rate (~10% VAT less 1% per year) and a treaty which requires all sellers of OSHW to boycott non-compliant sources and an efficient deciding body outside the courts.

        Patents have been an engine of innovation for the US, even if they have reached a tipping point; and btw Patents are suspended during wartime, and one argument could be made that the US Innovation has gone too long without a War - so to speak.

      • Kodak’s downfall wasn’t about IP licensing. Bulk of their revenue was from direct sale of film and camera whose decline was surely obvious to them. Kodak’s end was inability for the company to reinvent itself when world moved away from film and more recently digital cameras. Counterexample is Fugifilm who did survive the transition by reinvent. A good summary by the Economist: http://www.economist.com/node/21542796.

        Its unfortunate what has become of patents but they are not going away anytime soon, so it is how the game is played. In the game of sue/countersue, patents are required protection to stay alive in business against an aggressive larger competitor.

  • I fully agree and support OSHW (any designs I make, I always give away under beerware).

    But, my understanding of IP is that, you apply for a patent, you get it. You now have a short monopoly to do whatever you want with it, and once it’s over, you license it out to others and you just royalties for an extended period.

    Now, OSHW/OS in the industry, Sparkfun has shown quite a few nice OSHW designs, from DoFs to Arduino remakes, to sensor boards, but if you look at the big picture… That’s really a small subset of product types. I mean, there are other types of sensors out there (yes they can be more expensive) but they could have other features that users might want, or microcontrollers, not everyone wants to use AVR or PIC, what about Freescale or Renesas?

    My biggest complaint about OSHW is that, the actual innovations in products to sell or design is limited in a sphere of what they can do in a homebrew, and if they branch out, they either get stuck and give up (scrap their project), or there’s just a lack of documentation for them to read to go further. I’m a HUGE advocate on documentation (my own big project will have more documentation than anyone wants to know, because the devil is in the detail).

    To summarize: * OSHW Good and can grow, only if it will branch out of the comfort zone of typical products, and venture into new territory.

    • “My biggest complaint about OSHW is that, the actual innovations in products to sell or design is limited in a sphere of what they can do in a homebrew” sgrace, OSHW was “invented” by the poor, “homebrew”, guy, who does not plan on making millions from his/her design and also is generously willing to share freely. I am sure that the guys who invested heavily in industrial machines and processes are not going to open-source their products. Why would they?

  • I applaud the open-ness of your product offerings, that is they are largely compatible with development boards from various suppliers. In reality most of your product is making prototyping easier, but is not really “open hardware”. The real guts/brains/workings of the hardware, in the year 2012, is captured within the integrated circuits, as that is the modern point of capture for design algorithms, along with the software that runs on same. That hardware is heavily protected by patents and vendors continue to maintain proprietary rights to maintain the hammer lock they have on customers once a product is committed to a hardware platform, i.e. the software investment to change over to new hardware, once tuned to a particular hardware set, is formidable. You point to Kodak as an example. I point to ARM, Texas Instruments, Intel, nVidia, AMD (to a lesser extent). They do not represent openness and have a very successful biz model.

    All that nonsense stated, I am enjoying your product offering as it allows me to avoid having to deal with SMT components and build small products I have in mind, so thanks.

    • Of key importance, many of those ICs can be used, according to their public specs/datasheets, and without license to the parent company. They are material, not intellectual property. If a factory makes really good ball bearings, through a secret process, the knowledge of that process is only beneficial to those who want to duplicate the process or improve on it, but mostly comapanies/people will benefit from the use of the part, not the manufacture.

  • What a difficult subject. I’m an engineer, with an MBA. An inventor and entrepreneur. I have mixed and paradoxical feelings about IP.

    The basic argument in favor of IP is that capital won’t be available unless risk is minimized, and the temporary monopoly implied (note, not guaranteed) by a patent is a sanctioned method of lowering risk. The insanity of this can be shown by asking protectionists “you are saying if there were no patents, that is risk were the same across the board, that capital would no longer invent in new ideas?” That’s absurd. Patent or not, capital will want to grow. The capitalists argue that patents encourage competition. How? Well, by minimizing risk, capitalists will want to invest in new ideas. They will argue that without patents, there will be no competition, because no one will want to do anything new. Again, absurd, isn’t it?

    Let’s look at truly competitive aspects of human society. The most competitive activities I can think of are war, crime, fashion, and Formula 1 racing. None of these highly competitive activities follows the “logic” of the capitalists. They are highly competitive, and rapidly evolving. Yes, F1 is a bit of stretch because there are rules laid down by the FIA; however within those rules of the game, the sport is very competitive and innovative. In each of these copying is commonplace, but being copied just pushes the originators to further innovate.

    That is to say that I believe we would see more competition, more innovation if there were no intellectual property protection.

    The other side of the coin? Well, I have products I’m working on, ideas to deploy to the market. Like many I’m in the position where I need capital. That capital is hard to raise without protection. It’s the world we live in, and it’s how the financiers want the game played.

    Another “other side of the coin”. Sparkfun may have unpatented products; but what about trademarks? The value of Sparkfun is the (protected) brand. It’s true of many successful players. Look at lego, and all the “compatible with lego” products. Lego can survive that now because they have reached a point where the value of the protected brand exceeds the value of the protected technology. That may not have been the case early in their history. Sparkfun may be open with tech, but that would be a different story if someone was selling Sparkfun branded copies through a sparkfun2 website, shipping in nifty red boxes… Brand has value; it is difficult to build brand with a freely copied product.

    So philosophically I support open hardware, and more limitations on government licensed monopolies (patents). But in the real world, I don’t have a powerful brand to use as a vehicle to sell my ideas. I have a mortgage, kids to feed, that real world stuff. So, like the Makerbots guys, I have to face facts and personally use a tool that is not pure to my philosophical beliefs, but is a standard, accepted tool in industry. Sure the fan boys will call me a hypocrite, but then how many of those fanboys are putting their money where their mouth is and trying to start new businesses?

  • Two comments:

    First, I do think patents are less applicable in industries where innovation is incremental. While I love your concepts and product ideas, I would put your offerings in the category of incremental innovation. I would put most online and web services in that category as well.

    Second, as with ANY function that is not relevant to innovation, spending on it will “take away” from innovation funding. Whether that means marketing expenses, sales incentives, bloated salaries, and other expenses.

    Third, it is always easy to find examples supporting your claims. Yes, Kodak heavily patented as do most companies in mature markets (which are the markets most likely to be disrupted by smaller competitors) but I would bet you can find just as many companies that were knocked off that had no IP at all. They just sucked and likely because they could stay alive without any protectable ideas–either become a marginal player with a much smaller workforce or were slowly bled to death by a thousand cuts. Personally, I would rather go big or go home.

    Fourth and finally, I do generally agree that we over patent things which is why I view value as being qualitative and not quantitative. So while you argue that Instagram had no IP that was protectable, I would argue that MOST of their IP was their brand equity and not their technology at all (which you rightfully point out, Facebook could have built over the course of a few weeks or months at 1% of the cost). That too is intellectual property and is an exclusive right even if it is not patents.

    In sum, I think your model works for some industries, I think small companies in incremental markets should heed your advice but I also think that your fairly simplistic (and likely culturally popular) analysis fails the test of true research and instead points out a few losers, panders to the cultural sentiment of too many patents (which again–I largely agree with) and in the process simplifies what I think is a far deeper intellectual debate that can be presented in ten slides at TedX. :)

    • Really interesting points!

      1) Incremental: I think and talk best with examples. I’m pretty sure very big things (the space shuttle) can be built in parts. One could argue almost anything can be split into parts and incremented upon. What is Apple on now, the i5? The first couple versions didn’t have cut and paste functionality. Help me with an example where you think it’s not possible to incrementally innovate.

      2) We kicked around the slanket/snuggie example. I believe that Slanket got left behind because they could not creatively market their product. Both took the Walmart/infomercial approach. Had Slanket innovated in the marketing arena (Red Bull is king at this) perhaps they could have out snuggied snuggie. My point is that innovation is not only in R&D, it either permeates a company or it doesn’t.

      3) Going big or going home is a decent approach to business. Flash in the pan is what I call it. There’s many examples (anyone remember the Pets.com commercials?) of big bets. We’re not a big bet, we’re a bit more sustainable. Perhaps SparkFun will never be big but we will also never be mediocre.

      4) Ahh. Very good point. I agree but I’ll say your point a little differently: Community has value and is hard to copy. Instagram had/has a heck of a following and Facebook wanted it and paid for that community.

      If the idea of open source hardware as a business model wasn’t controversial and new it wouldn’t be suitable for TEDx :) You’re right, it’s very simplistic and amateur analysis, but I hope it causes a few people to think a little differently.

  • Inside the universal studios building off 101 is a population of pure lawyers who do nothing but enforce copyrights. They don’t produce a single movie anymore, but where do you draw the line? Open source your bank account? That would force you to innovate more quickly than open sourcing hardware. If the amount of open sourcing is proportional to the quality, you should not have a staff or make any profit beyond the cost of the the materials.

    • Really good point. I haven’t switched to bitcoin yet.

      I hope I didn’t come across as “open sourcing is proportional to the quality”. That’s a subset of point #2 (A marketplace with more open source is better for the user.)

      IP Obesity has to do with the competitiveness of a company. I would say that a company is inversely competitive to the amount of openness they embrace. The more closed the company, the more noncompetitive it will likely be.

  • Nice post Nate! I agree that Open Source works. It certainly has worked well for SparkFun.

    Having just received my patent in July, I thought I’d share my experience. All in all, it took me about $7K, 4 years, and many late nights working with my patent attorney and many late nights working alone. If nothing else, it was a huge learning experience and I do feel a great sense of accomplishment having made it through the system. You can check it out here if you like.

    Getting a patent was attractive to me because I saw the potential of my idea. As a gigging musician (and soon to be entrepreneur), I knew my invention was useful and knew that there were millions of other musician’s facing the same problems. I dream big, and I wanted to protect that dream.

    Looking back on it now, I’m still not sure if it was worth it. But if the day comes when a big monster company copies my idea and makes millions, I may decide to take them to court and get some kickback. But I’m going to continue to innovate no matter what happens. Even if I lost in court, I’ll still be tinkering away in the garage and creating new ideas till the day I die :)

    I guess what this all means is that open source is great for little companies, but if it came down to a big dog getting even richer off of some little dogs ideas, they should pay royalties. And that’s where patents can help.

    I wonder what would happen if Apple open sourced every new innovative product they created as they released it? I suppose at the very least they’d save money by not having to file the patents… But I think you’re right, it would force them to innovate even more quickly.

  • When you say 75 million in sales is that per year or since the start of Sparkfun? I don’t see patents going away anytime soon. For companies like Apple, Microsoft, and IBM patents make them a significant amount of money therefore they defend them. Microsoft gets android money from patents it has and they don’t really like android. In the scheme of things sparkfun patents aren’t worth that much and that’s what it is all about. If the stock investors of companies like Microsoft where windows can generate billions with a new release within a year found out that people were stealing it the investors would complain to high heaven and the stock wouldn’t be worth as much.

    But your right people will steal it. If your product doesn’t have a high rate of return and the licensing potential isn’t that good then it’s probably not worth the time and energy patenting it.

    • Sorry for the number with no citation! You are correct, that is total sales since the start of SparkFun (13M in the first half of this year, 25M last, 18M in 2010, 10M in 2009, etc).

      There’s absolutely a place for patents in today’s business world. But I argue it changes the mindset of those companies, hence the unfit analogy. Apple, Microsoft, IBM - I would argue they make up the 1% of the business world that people hear about. The rest of us have to figure out how to keep the lights on.

      • That’s true, the problem is though that small companies who worked on something and think it has potential obviously will want to protect it. Another problem is if they don’t patent it then when some other company like Microsoft comes along and uses it and they make more money than the original designers that’s not right either. So for the small company who needs to keep the lights on; having a patent will help a lot when it comes to dealing with Microsoft in court.

        For example Instagram. One product, If they don’t have rights to it or the ability to license out the technology then with 57 million and the 2 years they’ve spent developing that idea they can’t sell it to Facebook for a billion dollars (300 million in cash). So obviously patenting it and not open sourcing their work was worth it. And they did it with thirteen employee’s. I would say that business was in the end profitable. (http://en.wikipedia.org/wiki/Instagram)

        But I agree that they need to reform the patent law. People do get screwed over quite a bit because of them and there’s got to be a better solution.

        • For example Instagram. … So obviously patenting it and not open sourcing their work was worth it. And they did it with thirteen employee’s. I would say that business was in the end profitable.

          It’s possible that Instagram held a patent or two - I haven’t really looked into it - but in the software world, the form of IP law that really dominates is copyright. Instagram wasn’t acquired for a patent portfolio; it was acquired for a specific, copyrighted body of code, the infrastructure and knowledge to run it at scale, and (probably most importantly) a giant pile of users. Even if Instagram’s software was open source, it would almost certainly still be under copyright.

          “Intellectual Property” can be an awfully broad brush to paint with. It can be dangerous to conflate patents, trademarks, copyrights, trade secrets, and various other forms. At SparkFun, we do in fact have a bunch of IP in terms of the copyrights we hold - it’s just that we leverage the legal protections there by applying a liberal copyleft-ish license to the design of our products (and a slightly less liberal version of same to content like product images).

        • “So for the small company who needs to keep the lights on; having a patent will help a lot when it comes to dealing with Microsoft in court.”

          Defending IP in court against Microsoft….your lights will not be on for too long.

          Nate, Your the man! Great read, it’s fun to see into the mind of the master. Everywhere we look there are SF copies, but they are just that COPIES.

          • They’ll be on longer than if you didn’t have a patent.

            • Agree with jakkjakk. Microsoft has a lot more to lose in a countersuit if you have patented IP that they are violating. You’ll settle and survive one way or another. This is proven.

              Patents are a necessity for any small biz going up against a more aggressive competitor. Not patenting your core IP is leaving yourself dangerously open to getting wiped out.

              Doesn’t change you mindset about innovation, its just the cost of doing business.

            • This idea of resource burn rate vs income generation is sort of fundamental to the talk. You don’t and won’t agree with my view. Kodak didn’t either. That’s ok. My goal is to show folks that the patent mindset can be a detrimental one.

  • First, great discussion!

    “Maybe you think an open source company can’t be scaled above 150 people.”

    Was this remark motivated by Bre Pettis’s Sept 20 blog post, in which he dances around the notion of transitioning Makerbot from an opensource to a possibly closed business model? He suggested that opensource companies can only grow large (150+) when they create educational projects. Seemed like a baseless claim to me. Even if your post is a coincidence, you’ve made a fine response!

    Opensource has been around longer than many in the OSHW community realize. Humans have always tinkered, hacked, and derived ideas. OSHW is only the latest way of exchanging ideas, thanks to the Internet.

    • Can you open-source your cMoy v2.03 Headphone Amplifier PCB and schematic designs please :)

    • I agree - OSHW is not new, just recently clarified for geeks who build stuff.

      I’ve been spending the last three weeks rehearsing my talk with the other TEDx speakers. It’s been a huge undertaking but the other speakers and myself have really benefited from the meetings. The new Replicator 2 looks awesome but I haven’t talked with Bre about what else they’re up to.

  • We should mention Makerbot, now about to close source their latest 3D printer. They are leaving the roots that got them started to become ‘big’. They should be DEAD to us now…..

    • I can’t agree more. Bre Pettis talks up open hardware and software in public and then turns out to be a hypocrite when someone does what the very thing he spoke so strongly for when someone actually does it.

      Improvements don’t have to be about design or software. It can be as simple as being able to make it cheaper.

      The Arduino is a great example. It’s been copied countless times and is still going strong.

      • I remember visiting MDM East, a medical device and packaging trade show sometime around 2009. Also mixed in were vendors from relevant industries and one feature there were plastic rapid prototype machines that were basically large and very costly commercial makerbots. I even remember remarking to my friend that those things could be easily replicated with the guts of a hot-glue gun and a spool of plastic. When I was leaving I saw a few young guys waiting to get on the shuttle bus. One was holding holding this wooden thing with PCB’s and wires hanging off. I asked them what it was and was told its a makerbot, basically I met Bre and company. This was about a month before popular science printed an article about the makerbot and it started to take off. Before that day I never knew of the makerbot. I bet you any money he was shopping around his prototype at MDM to see if there was anyone looking to invest or buy his idea.

        If you ask me Bre has been looking to commercialize the makerbot from the beginning. Instead he used the OSHW/maker community to bootstrap his idea and is now moving on to a commercial version.

        • After reading various blogs about where makerbot was going I started to think about just what goes into a 3D printer. Your remark about using a hot glue gun as the basis for print head ran along my lines of thought. I located a box full of surplus stepper motors in my junk box and recalled homedepot’s stock of threaded rod and joiner nuts. I’m not sure if the hot glue gun works in the right temperature range to melt ABS, it would need a new nozzle with a smaller opening and I don’t know if I like running the heater on 120v AC (at least not without an isolation transformer). I do think I’m going to have to try and build a 3 axis platform controlled by my surplus steppers though. Even if it doesn’t serve as the basis for a 3D printer, I might end up strapping a dremmel to it and end up with a CNC carving machine.

          • If you think about it, any 3 axis (XYZ) CNC system can be adapted into a 3D printer. I had an idea for a makerbot like project but a little bigger with an interchangeable head and tool storage. It could be a small CNC mill for PCB milling and machining light materials (plastic, wood, soft metals). Then I could remove the mill head and replace it with a plastic dispenser and now I have a 3D printer. Then combine the two processes and you can rough out a part in plastic and then do fine machine work to finish it off. That enables you to make all sorts of fancy plastic parts like custom electronics enclosures with curved surfaces. A third head could be a laser cutting head for cutting light materials such as plastic but that might be tricky in terms of optics, beam delivery and cost, but not impossible. I even went as far as thinking about a pick and place head for placing SMD components onto PCB’s. You can make an entire electronics project on the machine from the PCB to the case. Think of it as a Swiss Army knife CNC. The idea came about when I wanted to build a CNC mill but also build a 3D printer. I knew they were both the same in terms of the motion system and mechanics. Why have two of the same thing taking up valuable space?

            It would be a great project but I just don’t have the money or time as of now :-(

            Oh and check out the reprap page, someone made a machine that looks like it uses a hot glue gun.

            • Check out the ShapeOko at www.inventables.com. You can get started with just a mechanical kit for < $400, or get a complete kit with motors and electronics for a couple of hundred more.

              Now I just need to finish building mine …

  • Great talk. I am a firm supporter of how SparkFun does business and the mindset you have chosen to adopt and carry forward in your business pursuits. I am extraordinarily proud, happy, and inspired that you’ve made it work, as a model example to the rest of us of what can be achieved by putting passion, ideals, and things people really love out on the table and letting the world embrace it. Keep up the excellent work!

  • A bit late to the party, but there are some glaring oversights in this article which need to be addressed.

    1. A patent protects an idea, technique or process, not a product. I do not think any of the SparkFun products would be 100% protected by patented aspects of those products. You are confusing patents with intellectual property protection, namely copyright.

    2. As pointed out, the IP investment in each product is small - I’d guess under $1000 in any one. Thus a competitor would save a maximum of that amount by copying rather than designing. Also, it makes no sense to spend $5000 for a patent to protect a $1000 idea.

    3. The products are relatively cheap. The SparkFun brand is well known, and by all accounts the marketing, promotion, sales & support is very good. This adds a barrier to any competitor.

    Add these three points together and patents don’t offer any advantage for this product type & market.

    Thinking that this applies to any company which holds a patent is wrong. If I have put $1M of R&D into a $1000 retail product, which does have innovative methods and techniques, then this is a totally different scenario than SparkFun. A $5000 patent is good protection for the product, and gives me some hope of recouping the R&D cost. As open source a $250 clone would quickly wipe out any hope of a return, and I would not have embarked on the R&D to begin with without that protection.

    Finally, remember that patents are actually used to all the sharing of ideas via licensing without the fear of losing trade secrets. In that way they benefit many, not just the inventor.

  • That’s very myoptic of you, Nate. Open Hardware works for your business because you don’t have a lot of intellectual property. But try betting the entire company on developing something brand new only to have the Chinese steal it and sell it below what you can recoup the development costs. It cost over $10B for Boeing to develop the 787. How is Boeing going to recoup that if they open up their drawings to everyone?

    I agree that the patent process needs reforming. Some companies patent an idea with no understanding of how to build the product and it blocks others who can turn the idea into a product

  • To re-iterate what a lot of people are saying, but some are missing, very little that SparkFun manufactures would ever be patentable, so “open source” is kind of a no-brainer!

    SparkFun makes very good “datasheet applications” of various ICs and components, but hardly anything that would ever be provided patent protection.

    Trying to patent a circuit made from off-the-shelf components would be near-impossible. The circuit itself may be covered by copyright, but it’s trivially easy to reverse engineer and change a few things and have exactly the same functionality, and not be infringing.

    Software (or firmware) is the magic sauce that give significant value to commodity boards and sensors, and that’s one kind of IP that you can control to a degree, and takes significantly more effort to reverse-engineer.

    The underlying problem here is trying to overreach with “open source”, and apply it to tech IP in general. IP protection is an absolute requirement where millions of dollars of R&D are at stake, but meaningless when it’s a board or device that can be designed by an amateur in a few hours. (I could (and have) easily design an Arduino-compatible board from scratch in a few hours in Eagle…)

  • So one of my concerns with releasing designs is that a company with deeper pockets will pick it up and take it further than our small company could initially, and thereby we’ll lose the ability to make a living off of our work. So my question is does Sparkfun ever produce open hardware projects that compete with the original creators? It looks like sometimes you work with other companies producing oshw eg. Arduino, and sometimes you produce them yourselves eg. OpenServo. When do you choose to fab a project yourselves? When do you choose to work with partnering companies?

  • What do you get if you cross a patent troll with the mafia? Thomas Edison. Years ago Edison hired “enforcers” to protect his patents on motion picture equipment. Independent film makers who didn’t use Edison equipment found themselves on the wrong end of blackjacks, clubs, and guns. It was a different world back then!

  • I’ve read the comments and agree in general. I made a few designs that worked but I never could get pullups/pulldowns nor assembly language…so I went into Network and Systems Engineering.

    Fast forward to now…I’m working on an Arduino based prosthetic arm controller because no one who makes prosthetic components is an amputee like me so they don’t have to live with it and use it every day and all the makers have patents/copyrights/trademarks like crazy. A wrist controller with simultaneous motion with a hand costs $3400 (the main controller is $15000). I coded it in 20 minutes (no, I didn’t reverse engineer…but I noticed they encase their designs in epoxy and add blocking diodes once someone figures something out so now I have to use an external relay rather than just reversing PWM polarity like I used to with a UK1122 or a TB6612).

    My point is they make it expensive because it is “medical”. That’s why I still use a body-powered “old-fashioned” arm until my design is done. Unfortunately, it is highly unlikely I will be able to sell it here in North America..but I hope, once I release it, enterprising prosthetists (there are few, to none of those here in the US, sadly) and amputees will send me improvements from everywhere to improve peoples lives. I couldn’t have started this idea, done in my spare time as a Network and Systems Engineer for a Hospital, without Sparkfun/Solarbotics/Jameco type entities and the whole Arduino community. I can market my components, eventually, because of the Sparkfun Arduino Bluetooth components so people can see it’s “high tech”. A big manufacturer of legs brags that it adjusts “1000 times a second” to your gait. My arm controller can do 5000/sec…not that it matters much in an arm (it may in a leg).

    Keep up the good work…Makerbot just screwed themselves with that whole thing. I need components I can make myself, but not for $2100 for their new (proprietary) device in my spare time. I’m going to buy the mbot3d.com 3d printer for my prosthetic parts needs for $700.00. If someone copies my designs? Oh well…they are helping people by doing it and I really want to know I helped! I don’t need, nor want, to be rich…I just want to live a decent life.

  • Unless you can afford to defend it (meaning lots of $ and productive time lost), then a patent is pretty much a useless effort, a money sink and a boat anchor to you and your business.

    If you have a big idea and a big company wants it, they will just use it. They know that typical defense costs when going against a big company can be in the millions. They retain big lawyers for big $ for precisely that reason. You cannot. You are not that rich. So if your idea is really good, you will go broke long before you ever get to court. And then the big company just uses it.

    If you have a little idea, then there will be the zerg-rush of copycats and again, you can’t stop the zergs. You cannot undertake a hundred legal actions, the patent cannot be enforced.

    So the reality of the matter is, that a patent can only work for big companies in this day and age. the little guys - they just can’t compete that way in the modern age.

  • I’m pretty sure that most or none of those 431 products would qualify for a patent. The rules are pretty strict as to what qualifies.

  • If the product(s) you are designing are low cost widgets that don’t require much effort to design and are not doing something new and unique (such as the products available on Sparkfun) then it’s pointless to try and patent anything. They are not unique and individually have little value. However, if a given company invests millions and years of work on developing complex new technology, complex new algorithms, etc, then of course you want to patent the concepts/products. Why would you spend millions just to allow someone else to reverse engineer your product and copy it for a fraction of your expense? It’s really all about the value of the product being designed. Having said all that, I do agree with the idea of open source design, but to be honest, if you guys at Sparkfun invented anti-gravity, or something really amazing, we all know you and your attorneys would be headed straight to the patent office!! Keep up the good work!

    • Almost all great inventions are the product of a single person. Less so nowadays, only because exceptional people have been pushed out of mainstream society, or forced into an uncomfortable box because everyone is special.

      That doesn’t mean that you can’t have fun with stuff.

      • While that lends itself to nice ideals and clean cut heroes of industry, it turns out many key inventions like the “telephone, telegraph, steam engine, photograph vacuum tube, radio” had multiple independent inventors, the successful of which were generally selected by a function of feasibility / proximity to means. At least if we are believe Steven Johnson’s book ‘Where Good Ideas Come From’.

        The same book explores the concepts of the adjacent possible, and the effect of collaboration on the creation and refinement of ideas. I think OSHW is good for those variables, and promoting OSHW is a good idea - though as I have argued elsewhere on this page, there’s a difference between promoting OSHW and ridiculing existing practices which at least makes a misguided attempt to value innovation.

        I love Reardonesque heroes of mind and means, but a proper OSHW culture does nothing to snub out the power of a thinking individual, whether they are inventing alone, or in a group.

        • I love Reardonesque heroes of mind and means, but a proper OSHW culture does nothing to snub out the power of a thinking individual, whether they are inventing alone, or in a group.

          Well said. Science, engineering, and art all need their visionaries and revolutionaries (and cat-herding leadership types), but a healthy collaborative culture doesn’t tear these people down. It enables them to use their exceptional capacities to a much greater extent.

          If we’re looking for SFnal role models in this field, I’ll take The Dispossessed or Anathem over Randian fantasies of pure heroic individualism every time.

  • Let’s see Sparkfun really go open source and embrace the software itself. As it stands their use of Eagle for EDA is going in the wrong direction.

  • For an interesting take on patents, check out Don Lancaster’s, “The Case Against Patents.” A good observation on his part is that patents don’t prevent companies from using your idea, they simply give you the right to sue if they do. If you’re a small company would you rather spend your money on litigation or development?

    • Get back to us after you’ve gone through the process of inventing something unique, then having your cajones cut off while someone else profits from your work. Let us know how you feel about it then. Until then, you have no idea what you’re talking about, and neither does Don Lancaster.

  • Here’s a HUGE problem you’re overlooking:

    For patents filed after March 16, 2013, the USPTO will move from “first to invent” to “first inventor to file”. If you don’t patent, someone else can, and lock you out. But even under the old system, which would you rather be, a patent-holder who can claim damages for infringement, or a challenger, who must foot the bill for a challenge that benefits other competitors, doesn’t stop a discredited patentor (it’s now open game), and won’t be compensated for costs?

    Here’s a breakdown of the differences between US “First Inventor to File”, “First to Invent” and straight “First to File”

  • OSHW is great, and so is the culture around it, but its dangerous to promote it as a panacea to all the woes in commercial product development.

    When a big company like Apple invests billions into a product like the original iPhone that changes the paradigms (even in arguably obvious ways) the expectation is that they will profit from their investment proportionate to its success. But if our culture embraces and encourages the immediate and unrestricted appropriation of any product, then even the success of an already risky investment is not enough to promise a good return.

    Apple is a good example in the other direction too. Their recent litigious assault has been downright repellant, and illustrates many of the problems with our patent system.

    OSHW will go a long way to help these problems, and perhaps rapid incremental development is a better approach to product development on all scales; but as yet, I have not seen a purely technical* innovation of the same scale come out of OSHW. I think it would be better lead by example than by reproach. And that’s a good thing, because SparkFun has been leading by example quite well, and my life is richer as a result.

    * Most of the game-changers brought on with OSHW have less to do with the tech, and more to do with opening a given tech to larger groups of people, or removing some restriction that is not inherent in the tech. This is of course awesome, and I really that the culture of enabled end users continues to bubble up to even the most patent-obsessed companies.

  • Sorry–one more comment. I would cease suing Canon as a contrast to Kodak. The reality is that Canon is also one of the top ten patent filers every year. So you could argue that Kodak v Canon was more on strategy, quality and execution than patent filings as Canon was largely kicking Kodak’s butts in the patent game for most of the last decade.

  • I disagree with the article on IP obesity. After taking 17 rolls of film to Hawaii for my honeymoon, I invested in a digital camera to save money and I don’t remember Kodak being a major player in digital cameras. The reason Kodak was a disadvantage was because they are an American company that failed to innovate and think outside of the box. Their history was invested in old fashioned photography.

    I believe people should be payed for their work. Should music on the radio be open source? Would artists get paid if everyone copied their work and sent it around the internet for free? Would there be more music or less music? If an artist can’t eat, they will have to get another job meaning less music.

    There was a Commodore user who invented a fast loader. Because he was a kid, he shared it and it was copied around. He didn’t make any money on it because he didn’t have money to patent it. Large companies took his idea and made money on it and had an advantage of the market.

    My friend left for Los Angeles to become involved in the music industry as a singer and an artist. One of the reason he left sales was because people would teach him to do the selling and not pay him any money. His example was “Why should I do all this work for someone else to make all the money?”

    Why should I get involved with hardware companies if they don’t want to pay and if they only want my design for free? What is in it for me? The answer is nothing. They want to corner me and work me so they can get something out of me and give me nothing in return.

    Considering that Oscilloscopes are expensive and equipment is expensive, paying the designer more so they could innovate and have time to learn would increase the number of good products and not the other way around.

    • The Commodore 64 user who invented a fast loader is named Thomas Tempelmann. You can read his story here.

    • The concept of Open Source Hardware stands behind paying people for their work. When you hear ‘free’ in correlation with open source hardware it means libre not gratis, access not dollars. The Open Source Hardware companies out there today pay their employees and pay royalties to the community if they produce someone else’s design. It also means people get attribution for their work and the license must remain open virally for anyone else who copies it.

      I’m not sure about the Kodak v. Canon model, I haven’t researched it. But, I have seen some articles about openness in the music industry. When radios first came out, the music industry was worried people would stop buying music because they could hear it for free, but the exact opposite happened, people bought more, being exposed to new artists. And artists who have released music under creative commons licenses rather than copyright have at time made more money than from their copyrighted albums.

      Open is a concept behind the licensing, not behind payment for work. I have been researching economics and patents, especially outside the US and how it relates to US innovation. There’s a lot out there which show patents are not correlated with economic growth. Here’s a couple resources, hope these help!

      http://www.techdirt.com/articles/20090531/0908085070.shtml http://www.dklevine.com/papers/ip.ch.8.m1004.pdf

      • Hello,

        Here is a concrete example … I’m the designer of the BRAIN Flybarless system for MSH. I spent about 2 years working on it, designed hardware, embedded software and PC software (+ now Android software).

        I wasn’t paid during development (the first year and half I kept my “regular job” working as a developer, and worked on evenings and week-ends, vacancies, etc), I’m now paid via royalties. We did this because there are very few companies in this domain that can handle (or take the risk) to pay a developer for 2 years for “probably a sellable product”.

        There is nothing quiet new in the hardware design, all the IP is in the embedded software.

        Can you explain me what would happen if I just put this as open source ?

        My expectation is that within 2 months, the chinease would copy it, burn the open source program in it, and make tons of money with it. My royalties ? None, why would you pay something 200€ when you can buy a copy for half or less ? Would I have time and money (and will !) to develop anoher product ? I guess not.

        You know the baseline about software security, at least for me, is this : “Software can be cracked, you can use any encryption, any protection, it can be cracked (and patents are just for fools). The problem is not to make it impossible to crack, as it’s not possible, but make it sufficiently expensive to crack for it to not be interesting to spend that much money”.

        I can see in OSHW only projects that does not worth copying them at big scale (because it’s a small market, or too expensive to produce, etc). I don’t see any opportunity for the kind of projects I have.

        Thomas.

        • Hi Thomas - The point of the talk is “If you idea can be sold it will be.” You’re right, if you release it open source, it will be copied. But that’s actually a good thing for you.

          If you know you are going to be copied, you’ll probably find ways to make it harder for the competition to be successful. For example, you’ll probably increase your interaction with your users, you’ll have more of a community. You’ll listen to their ideas and come out with new products that serve the user base better than your competition.

          If you close your idea you’ll probably tend to spend your time looking for ways to make it harder for the competition to copy it. This is wasted time because your idea will be copied regardless. Your product will then become mediocre because the competition (that doesn’t care who copies who) will have passed you by.

          By opening up your design it’s a way to kick yourself into a higher gear mentally. Sorry if I fail to make the argument clear.

          • Hello,

            I understand your point of view, but in my world this couldn’t be an option.

            In 2 years I spent about 4 months just for security, trying to get my product hard enough to copy so that it’s not interesting for Chinease. Yes that’s a lot, that’s 4 months I didn’t work on improving the flight caracteristics. But I doubt - for now - it will be copied, at least for a few months.

            I have quiet good interaction with the users I think (http://www.helifreak.com/forumdisplay.php?f=308) and that’s a very interesting part of the project for sure, I also try to spread as much as possible informations, explaining PID, etc. I’m trying to be as much “open developer” as possible, just keeping minimal IP protection.

            For me the biggest problem for “us” (software developers), is that people don’t care about who did the R&D work, if they can find a copy for half of the price, they’ll buy it, but Chinease don’t have to pay any R&D.

            If I was confident people would buy my product because it’s guenuine, better quality, etc, even if there is a 50% price copy from Chinease I’d do it, no problem. But today I’m confident if I do release my code under open source, in 2 months there will be a Chinease copy, and people will buy this one and not mine, and even probably come angry at ME because their Chinease copy doesn’t work (already happened) and asking me to fix it. In the meantime I get 0 money to feed my family and develop new products.

            I don’t want to spend 90% of my time trying to improve security, I want to improve products and release new features (hardware features, which take longer to copy, software features can be copied in seconds) and new products …

            Trust me each time I start a new project I’m asking if it could be suitable for open source, but it can’t if :

            • there is some protected third party in it
            • it takes a long time/money to develop and will probably generates some money

            Unfortunately that covers 95% of the projects I’m working on.

            Moreover, if I were to release the BRAIN under open source, you’d find Chinease copies for half the price, which is less than any competitor, so it would just kill everyone … and without competitors there is no innovation.

            I’m more “kicked” by doing better and cheaper than the competition than give all the R&D money to the Chinease and being forced to introduce some unneeded features just to try to make people buy my product and not the copy.

            I think releasing under open source is just part of the problem, it is a new commercial strategy, in which we have to find ways to garantee R&D to be paid.

            Thomas.

            PS : I can be missing something but did you release any commercial grade software (not a demo or “use it at your own risks”) in open source ? Open source hardware is a lot easier because even if I take one of your open source product, and want to copy it, for me it would be probably more expensive than buying the real one (what is the R&D part in the final price ? 10%, 15% ?), open source software is a bit different, copying software doesn’t require any investment, and the price is 100% R&D.

            PS2 : don’t take me wrong, I really like open-source, I’d really want to make open-source things, but I’m looking for reasonnable (that feed my family and pay my appartment) way of working on open-source things. Hope you can help me with that.

            • Hello,

              I opened a poll on helifreak to get users feedback … hope they will play the game honnestly.

              http://www.helifreak.com/showthread.php?t=456433

              Thomas.

            • Just for example, if it was possible (it’s not because I can’t take this decision alone and not really working with “open source friendly” people on this project), I would release the PC software in open source …

              This would make sense … it’s free, generates income but only via the unit sales (still closed source), doesn’t contain any important IP, and would open the door for improvements and discussions about how it’s programmed (sometime you have enough time to make it clean, sometimes you don’t ;) ).

  • I thought the Slanket was first, then knocked off (and marketed to the point of ridicule) as the Snuggie? (Not that it alters your basic point. Especially since it sounds like something called “Freedom Blanket” predated them both by a small margin. I guess sleeved blankets were just in the zeitgeist then.)

    • You know what, I’m not sure!

      Let’s say Slanket was first to market. When Snuggie out-marketed them (and convinced me they were the original) what was Slanket’s response? Did they come out with the Sports edition of Slanket? How about the hunting version? Perhaps an eco-friendly - ya, I’ll just stop now. My point is that all ideas are cloned and riffed upon. Every day a company yells foul and relies on legal recourse is a day they’re not coming up with the next big thing.

  • If anyone at sparkfun reads through these comments (I’m sure you will) Please pass this on: You guys rock. I hope to pass on the ideals you guys value onto the hackerspace I’ve started in town. I hope I can turn a few more capitalistic money mongers towards the idea that if you make something great, something that people will use, then the money might follow.. but to not be worried about it. I read somewhere “Let’s move away from ‘look what I can do’ and towards ‘look what I can teach you’ ”. I hope some day I can do what I love every day like you guys. Again, you guys rock!

    TopHatHacker of the Minot Makers (http://minotmakers.com)

  • Nicely said. I think I need to print this and hang it on my office wall just to refer to it whenever I start to feel like guarding my work. It can be a cure for the rare time I start to drag my feet rather than post my stuff with a CC or GPL license.

    Can you bake this up and feed it to makerbot? I’d love to see them turn back onto the trail you’re blazing.

  • The best thing about Sparkfun is - (too many to list here).

  • Nathan, I was invited to the same TEDx talk by a friend that will also be speaking. Was pleasantly surprised to to see your name on the lineup. Should be an interesting evening!

  • This sounds like a great presentation! Surely there’s a video of it online?

  • Sparkfun got me into thinking about how stuff really work! My old electronics teachers word “ Back in those days we actually knew how the computer worked” echos in My head each time I read a great data sheet from Sparkfun, even better with tutorials. Sparkfun brought this back to me. Now im getting frustraded about hidden information, closed data protocols, bad design that can’t be altered( DIY) and one use Only products. Keep up the good work by keeping Technology Open. Im still waiting for that UberScienceShield ( but in secret working on one of My own), with OpenLog fused with sensorboards, RTC, Xbee, motorcontrol driver and Arduino. Delivery date?

    • This should have everything you need… https://www.sparkfun.com/products/10623

      • Great! Does it come in black?…

        OpenLog works fine with RTC, LM35, LDR, LCD, Humidity sensor and XBee in my window so far( nothing fancy) now Im working on the Aquarino ( Aquarium controlled by Arduino). I mean the pet shops doesn’t have the right stuff… Build with Sparkfun parts and controlled by OSC ( still working on that)- got the Sparkfun tutorial. Processing interface done, looks great on the Tv(AirPlay)…

        Open Hardware/ software= fast prototyping= educational and let people think! And build! Improve! Did you know that the seat belts( modern form of it) in cars were invented in Sweden and then “ OpensourceHardwared” by the inventor? Great!

  • SFE and others like you is where the real heart and soul of innovation comes from. Open Source allows others to improve and change things for the better and return that back to the people to be improved upon once again. It’s an endless circle of ever growing knowledge.

  • I don’t know if the Kodak argument above is fair. Digital photography only took off in the late 1990s because of a combination of sensor manufacturing, storage technology (remember the floppy disk digital cameras?), and multiple companies simultaneously entering the digital photography market. It wasn’t because Kodak sat on its patents. Hell, Kodak created the first digital camera, and also had a long line of successful digital cameras in the 1990s, and also innovated many different sensors. They were also #1 in digital camera sales as late as 2005.

    Kodak went down because it couldn’t compete with cheaper offerings from Asia, while at the same time their bread and butter–film sales–were tailing off. They had great innovative technologies from sensors to cameras–much like Polaroid as well. However great an innovation may be, if it can’t be marketed as a product, it’s not going to pay the bills.

    This kind of competition may even do-in Sparkfun, as many Chinese sites are offering the same kind of breakout boards, sensor kits, etc. as you guys, but at a fraction of the prices. Those products are not really “innovation” products, but rather something people buy because they cannot build them at home without PCB makers, reflow ovens and pick-and-placers. Sparkfun will definitely need to innovate beyond breakout boards to stay competitive against the manufacturing might of Asia.

    • (remember the floppy disk digital cameras?)

      I had one of those until a few years ago. Gave it to a friend who had it stolen hitchhiking through New Mexico…

  • Awesome Talk/post! I really think SparkFun is doin' things right.

  • I’m really surprised more companies don’t try to clone your business model and philosophy instead of your products. You guys figured out the right way to run a business AND put it out there for everyone to see and duplicate. I can’t wait to hear your talk tomorrow night!

    • They are :). I run a local startup in Boulder and I take a direct leaf out of Nate’s example as philosophical inspiration, for a company of eight employees. If you’ve ever had a chance to talk with any of the SparkFun employees, they are passionate, creative, and love what they do. It’s a great template to work from, and we occasionally collaborate with SparkFunians from time to time for help with our projects. Making geekiness trendy, accepted, and profitable is a fantastic endeavor, and it’s impressive to see SparkFun succeed with that mentality and blaze the trail for the rest of us to follow.

  • Damn, every time I come to your site I am impressed. I have to place an order, (yes I am a tool), but we need more companies like yours. The little support I can offer will hopefully add up to something HUGE.

    • Thanks! But don’t feel like you have to buy something. Get inspired first. It’s easiest to learn when you’ve got a nagging problem. Just have a look at Blender Defender. That guy had a problem and he figured out a heck of a solution and probably learned a ton along the way.

  • Great talk Nate, I especially like the Kodak vs Cannon example. I think most people here will be in strong agreement with you (me included) but would you tell me, are you appose to all patents? Can you imagine a situation where sparkfun might be interested in seeking a patent?

    • I was thinking the other day the big thing SparkFun did was back in 2004 we convinced ourselves (mostly) that the true universal connector was an unpopulated 0.1" spaced header footprint. You can find it on nearly every product we build. Had I patented that idea (not sure if I could) I imagine we could have made some money and tried to block competitors into this market of electronics and hacking. But over time, without competitors to drive us, our products would not have been nearly as good as they are today. I think we’re a better, more profitable business because of it.

      I am not opposed to all patents! There’s room for both paths (patents and open source).

      • I think the original idea behind patents was to protect inventors, not to enable companies to corner the market for profit. Basically a patent should be used by someone who does mostly design work and doesn’t actually produce a product. A company like SparkFun has little need for a patent because they sell the physical products they make, and that’s how they make money. Now, if SparkFun went and designed it’s own micro controller, they would have to patent it and license it out to someone else to make a profit from their design work, since they, as far as I know, do not have the means to manufacture such a product.

  • Thank you so much, Nate! You continue to inspire in all that you do with your company, your employees, and your customers. I (along with 599,999 others and counting) will always choose to send my money to a company who continually innovates, and helps others to do the same, rather than a company who merely copies to help themselves. And even your take on those companies acting as “replacement parts sellers” shows a philosophy of forward thinking not often seen in the business world. Keep up the great work!

    • Thanks HelicopterGuy! You should always spend your money with the company that innovates and has the best mix of features, price, quality and availability. SparkFun won’t always be the company that has the best mix for you but we’ll try. And if we ever veer off course, let us know! We’ll do our best to get back on the tracks.

      Welcome to business on the internet. Man it’s fast!

  • Great use of the TED forum. Keep up the innovation John. We appreciate your teams diligence and hard work! You have to love the invisible hand - Welder and Chicago trained Economist.

  • Great stuff, Nate. Thanks! Can you do a tutorial on how to set up an i9 phone for Android?

  • Keep up the good fight Sparkfun! Its great to have such a vibrant company remain open and free to allow itself to innovate and grow organically. As Ned put it we are lucky to have you in the community, and you serve as a great example for others to follow!!

  • Hear, hear. I fully understand the intent of patents - but for small companies it generally fails to achieve that intent, while for big companies it tends to be used either to stifle other companies' innovation or as a “let’s just sit on it and collect money” business method. Although there are worse - patents that exist, are ‘policed’, but not licensed out at all.

    (Although it'ss kind of cool that SparkFun is cited in at least 3 patents - not as a holder, but simply as a supplier of a component used in an invention. It would be neat to have a type of testimonials page with people explaining what the SFE components are used for.)

    I think you’ve written about this before - but being as open as SFE is, you’re actually forcing yourself to keep innovating, listening to customers, catering to demand. For SFE, that approach absolutely makes sense.

  • I can not thank you enough for opening my eyes to open source. You have change my life forever, and for that thanks!

  • Cheers to everyone @ SparkFun for your vision and leadership!! We are super lucky to have you here in our Boulder community!!!


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