4.1. Theoretical contributions

As mentioned before, the findings of this study contribute to the development of the existing theory mainly in two directions. Firstly, the empirical evidence on user entrepreneurs in OSH shows that the model of End-User Entrepreneur proposed by Shah and Tripsas cannot be fully replicated in contexts such as OSH, therefore an adaption was proposed in the previous chapter. To ensure completeness, also the classical Entrepreneurial View is included in the analysis. Secondly, this research enhances the literature on OSH, which is quite limited so far, bringing out some similarities with OSS and the differences, which was discussed in the first chapter.

In order to show the main contributions for each theory in a systematic way, five variables were chosen with the aim to show the main similarities and dissimilarities among the discussed theories, those are the following:

 

  • Starting point: in which context users become innovators or entrepreneurs;
  • Motivation: what drives users to become entrepreneurs;
  • Commercialization: why and how users decide to put on the market their inventions or if not, who and how take advantages of a potential business opportunity;
  • Community: what is the function of the community in the idea’s generation process and whether it has any role in the commercialization process;
  • IPR: what are the protections employed and how they are used.

The combination of these variables along with the theories discussed in chapter one generates the following table, where in the last column there are reported the main contributions for OSH derived from this study.

Table 5 User Innovation and Open Source theories-comparison

 

  User Innovation

User Entrepreneurship

Entrepreneurship

OSS

OSH

Starting point

Problem solving- user’s unmet needs

Problem solving- user’s unmet needs

Opportunity recognition, then evaluation

Market failure of public goods:  provide a better and cheaper solution for everyone

Not necessarily a need: mainly Arduino hobbyists, who became entrepreneurs by “coincident”.

Education also a crucial role. Never intention to commercialize

Motivation

Satisfy an own need. Stronger for lead users who are ahead of others and get great benefit from innovation

Returns not only expressed in economic term: social advantages; users can spend a greater fraction of their time on activities related to their interests

Desire for financial gain.

Company sets a priori:

Experimentation and adaptation occur after the decision to start a firm

Users’ developers are rewarded mainly by non-monetary incentive. No separation between the innovator and the user

Returns not only expressed in economic term: users can dedicate more time to their hobby obtaining enough money to reinvest in further activities. Separation between design, development and usage stimulates opportunities of own production. Social exposition

Commercialization

Exploited only by manufacturers involving lead users who freely reveal their ideas: customer collaboration

Users recognize an opportunity later. Development, testing, and idea definition are performed by users before they even contemplate founding a firm, thanks to communities and public interaction

Supported by venture capital and university-based technology.

Entrepreneur orchestrates all the activities undertaking the risk

Mainly students are involved in innovation process as potential commercialization.

Companies get benefit employing a particular business model (e.g. Red Hat, IBM)

Users within a community recognize and support the commercial opportunity. OSHspecialists may also exploit that given the presence of some barriers that prevent users from becoming entrepreneurs.

Indirect selling of software with the diffusion of OSH.

Support from 3D printers

Community

Allow brainstorming of ideas, collective creativity that is open and can be shared with others.

Idea identification by companies through content analysis.

Allow brainstorming of ideas, collective creativity that is open and can be shared with others.

First hand information from users with different backgrounds-market test.

Feedback occurs after the public exposition of the solution of perceived needs. Allow brainstorming of ideas, collective creativity that is open and can be shared with others.

Bazaar vs. cathedral.

In case of tangible products the presence of “physical community” is also important.

Main asset of Arduino companies: social hardware.

Not only recognize the opportunity, support the birth of the new venture.

IPR

Employed by manufacturers in order to protect their innovation investment

Not fully discussed.

Employed by manufacturers in order to protect their innovation investment

Copyleft: GPL forces every program to be released in its entirety as free software. Apache allows programmers to make modifications

Creative common-attribution share alike licence. Brand is the only asset that needs legal protection.

Presence of social norms.

Low IPR enhance diffusion, hence also the suppliers’ surplus

 

The table displays several important considerations, to be added to the ones already made in chapter 3 about the Shah and Tripsas’ model.

First of all, it is stressed that users’ starting point in OSH is not necessarily a need. Those are enthusiastic users, passionate hobbyists, who come up with something innovative while performing their activities, which is not always a response to a need. Moreover, commercialization ofOSSis generally not managed by user innovators as those are very often students who lack resources to invest, which is why giants like IBM can profit from OS. Moreover in other contexts it seems that users may lack motivation to engage in starting a company, which is further diminished by the risk connected to tangibility of OSH. The analysis shows that some users might not be interested in exploiting arising opportunities for personal reasons and due to some barriers that prevent them to become entrepreneurs. Others, however, would prefer to spread their innovation even for free or at the price that are needed to cover prototyping activities. Generally, it seems that the risk is not the main reason why users are not willing to exploit their ideas. The Arduino story shows that the amount of money required to lay the foundation of an innovative concept that may destroy a quite stable environment is relatively small. It is mainly limited to the interest of innovators to lose their current jobs, which are usually to some extent related to innovators’ hobbies, but also certain external barriers such as the difficulty to establish a company with mass production, to afford the costs of a production and to establish a distribution system or to utilize an established network.

Furthermore in case of OSH also the physical community is of a huge importance. These include communities such as NYC Resistor in Brooklyn (New York), Hacker Space (London), Meta (Amsterdam) and Man D’Ouvres (Paris).

Interestingly, the role of IPR shows high peculiarity in this environment. Manufacturers adopt legal protection in order to protect their investment in innovation. In OSS, on the other hand, the open approach transforms the copyright into copyleft as these licences allow everyone to release new versions recognizing the right of the first owner to the previous version. What is new in OSH is that the low IPR regimes enhance the diffusion of hardware. They increase the pace of innovation along with the spreading of new technologies. In particular, some informants state that they would be happy if their products are copied, because they delude themselves to see the innovation, they get respect in the business community and they can profit from extra activities related to their products such as complementary services as well as consulting about the design, projects or development of new gadgets. In addition, in the words of Anderson “the protections in OSH are not legal, but social”, meaning that the presence of social norms seems strong enough to defend users as in OSS reputation does matter and users are not incentivised to copy as their reputation may suffer (Di Stefano and Verona forthcoming).

Finally, the study adds some points about the main differences between OS Software and Hardware (discussed in the first chapter).

On the one hand,OSSit is easier for companies to make profit as the cost of replication is virtually zero, and there is no cost of storage and duplication, no supply chains, inventory and liability. However, it is much more difficult to find a viable market gap. Moreover, the “waterfall effect” is faster in software, because of the easiness to release a new version by users.

On the other hand, inOSHis also relatively easy to start a business but it requires an initial investment that is not necessary in case ofOSS. Moreover, hardware is a durable good with a life cycle different from the software’s and it is also more difficult to release new versions. Furthermore,OSHshould have a larger impact on other industries than software, e.g. Pharmaceuticals or Manufacturing (thanks to 3D printers). In addition, independent and separated steps inOSHallow people to work even solely on one aspect, (e.g. the design). Finally, regarding the time of development, it should be noticed that the informants did not quite agree about that: some believe thatOSHwill growth slower thanOSS, others, however, stated the opposite. This difference in perception might come from different backgrounds and usage of Arduino by different informants.

 

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