Open source hardware entrepreneurship

Abstract

Having overturned the traditional producer-led, in-house production model of software, open source entered the physical world and started to change physical products' development and commercialization process. Will open source diversify the hardware world as it did in software 20 years ago? Since mid-2000, engineer entrepreneurs were observed to have purposefully chosen to abandon the intellectual properties of their products and licensed the design under open source licenses. As a consequence, public are allowed to participate to the product design processes from an early phase and interact with firms in an open, transparent way. It is reasonable to consider this extreme openness as a high risk move for hardware startup-level firms, who are normally resource-scarce, capital-intense and loosely organized. Then, the research questions come as how open source hardware firms generate profit and manage risks? Can open source model be a sustainable hardware development model in an entrepreneurial setting? Using data collected from 66 open source hardware firms over 4 years across 21 countries, the research questions were answered with a series of four research projects. In brief, the success of open source model in entrepreneurial activities is a result of dynamic design of organizational openness and community governance mechanism according to firm's business model and community's social needs, so that firms are able to exploit community value brought by being open and mitigate risks associated. Open source hardware entrepreneurship can serve as an extreme application of open innovation and user innovation theories in hardware venture creation, and we hope to use this work as a pilot study for the emerging socio-technological phenomenon.