Does Open Source Hardware Have A Sustainable Business Model? An Analysis of Value Creation And Capture Mechanisms in Open Source Hardware Companies

DS 94: Proceedings of the Design Society: 22nd International Conference on Engineering Design (ICED19)

Year: 2019
Editor: Wartzack, Sandro; Schleich, Benjamin; Gon
Author: Li, Zhuoxuan; Seering, Warren
Series: ICED
Institution: Massachusetts Institute of Technology
Section: Innovation engineering
DOI number:
ISSN: 2220-4342


Analyzing value creation and capture mechanisms of open source hardware startup companies, this paper illustrates how an open source strategy can make economical sense for hardware startups. By interviewing 37 open source hardware company leaders, 12 company community members as well as analyzing forum data of 3 open source hardware companies; we realize that by open sourcing the design of hardware, a company can naturally establish its community, which is a key element for a company?s success. Establishing a community can increase customer perceived value, decrease product development and sales cost, shorten product go-to-market time, and incubate startups with knowledge, experience and resources. These advantages can compensate for the risks associated with open source strategies and can make open source design a viable product development strategy for hardware startups.

Keywords: Open source design, Open innovation, Entrepreneurship, Business models and considerations


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