 And I was formerly with Chumbi until December. And Chumbi is one of, it was open source hardware. It was one of the things that they did. And we did mass production of hardware, which I think is why I'm on this panel to talk about experiences there and so forth. And I'm an engineer as well. I build stuff. I like to build stuff. I like to take things apart. And I like to talk about doing that. My name is Nathan Seidel. I started a Spark funnel electronics nine years ago. It's a website on the internet where you can buy these little electronic bits. And we actually manufacture and build these devices in Boulder, Colorado. So nine years ago it started with me in a bedroom. And then here we are today with 135 employees. We build about 60,000 widgets a month. And we ship this stuff all over the world. So you were asking earlier about suppliers. I was in the same situation you were ten years ago saying, where can I get this stuff? And I saw the void and decided to start my own company building this stuff. Spark 5 uses open source hardware as a business principle, as a business model. So we actually open source our designs so that our customers can learn from us and we can learn from our customers. So I and I have worked together on some bits and Lee and I have worked together on some products as well. So collaboration is the core part of our business. My name is Leah Beekley. I'm a professor at MIT Media Lab and I work with Davis on the last panel. And a project that I worked on when I was in graduate school turned into collaborative projects that I worked on with Nathan. So Nathan manufactures and distributes a series of devices that kind of came out of some of my previous research and we continue to collaborate on that. So my first question may be an obvious one. But when I start thinking about businesses, the first thing I think about it usually is what can I give away as part of my business model? So when you started thinking, I know you all come to this from slightly different angles, but what made you think that open source hardware was a viable business model? When you saw that, why did you say open source hardware is the way that I want to go with this business that I'm starting with? So I should just preface this by saying that the company is only six months old. So anything I say may or may not hold for another six months or a year. So ask me again if that is valid. But I believe that throughout civilization we invented the best things, sharing them and building on top of each other's invention. And then one day the past system came and started saying you have to put these blocks around your inventions and prevent other people from building. And that was an interesting tool to protect your business, protect your ideas, but then it started becoming a very kind of defensive and counterproductive mechanism because you have companies that are in total lockdown that are preventing other companies from innovating, preventing individuals from innovating, and I think it's a really broken system. And so a little bit is founded on the principle that we want to turn people into inventors and we want to kind of bring back this concept of making at a young age for kids that used to, for our generation and previous generation that played with Lego and learned about space and structural and how to be builders and how to think about the world. You know today we need the equivalent for how you think about an interactive world, how you think about a world that is built on electronics. And so in order for that to happen there's either I could have gone the Lego route which is build a company over 50 years and find every possible thing and do that or since I'm not very patient and I kind of wanted to jump all that I believe that open touch was the way to go because when the sort of the basis is out there people would contribute to it it would start to proliferate faster and it becomes useful for everybody. And so we... Well I think for Chumbi one of the things that a lot of people don't realize Chumbi is a software company they're not a hardware company a lot of people think that because we made hardware we're a hardware company. The business model was to build a platform on which the software would run. At the time when we introduced Chumbi if you don't know what it is it's basically this app platform for getting the internet connected to dumb devices so alarm clocks and photo frames and that sort of stuff and this is before the iPhone existed so the word app didn't exist people didn't know what apps were explaining to them and so we built a hardware platform because there wasn't something out there that was a smart alarm clock back in the day when we started the company and one of the things we wanted to do was we wanted to get the platform out there as broadly as possible so open sourcing it really made sense because we wanted to lower the barriers to people adopting the platform in an ecosystem building really in an ecosystem around the product to make it successful SparkFun at least it was a nine year process it wasn't overnight that we said we're going to do open source hardware it grew and we said maybe we could share some of these designs and other folks could benefit from this and then what we realized is we could use it as a business advantage so by open sourcing our designs we enable our competitors to copy us so within 12 to 14 weeks our competitors can copy a device that we come up with well this means that that forces us to innovate it forces us to create something new every 12 to 14 weeks so where other companies sort of say oh my god we've got to patent everything SparkFun says you know what we can't patent anything because then we would sit on our laurels so we use open source as a market driver as a business partner and it's been fairly successful for me it was a very very pragmatic choice and thinking about this space as an individual the way I see it is that open source hardware provides you with a queer development structure that gives you speed and agility and low cost so just being able to kind of not deal, not worry about the IP universe I mean eliminates a tremendous amount of kind of heartache time and energy and so you can just kind of get rid of all of that investment to worry about when you think about starting a hardware business and as the community is kind of organizing and structuring itself and articulating what open source hardware means you now have increasingly kind of this platform to build upon this community to kind of interact with and kind of a kind of noble goal also that you can feel like you're part of and kind of advocate for so there are lots of lots of pragmatic benefits as well and that's largely what I actually have I mean all of your businesses are various years or months old, the case may be but I suspect that for each one of you you said okay we're going to do open source hardware there must have been a moment where you expected you expected the business to look like that people want to react one way but you got some sort of strange we talked a lot about the community some community feedback that you didn't expect or that you said to yourself oh that certainly wasn't anything that I would have expected what kind of what kind of strange unexpected things have you seen that come from the fact that you are open source hardware? I think one of the crucial things that happened and I don't know if this is because it was open source or just because I was showing it to a lot of people so I don't know where the line is drawn but in the very early days of little bits when I was starting I imagined it as a prototyping tool so it was a way for you to be able to create an object, a prototype if you're a designer or an architect that had light and sound and sensors without having to be an engineer and I imagined the prototyping and the design market to be kind of who would be interested in this and I started showing it around at a lot of these events that are you know more focused on open source hardware things like MakerFrance and stuff like that and suddenly I started seeing that actually kids were very interested in it Clarence would come up to me and say this is actually a very important educational tool and teachers would come up and say and so I don't know if it's particularly because it's open source or not and at the time there wasn't really much to share but the feedback from the community was definitely a very very important driver because I shifted the sort of focus of the platform to another type of user and felt like there was really an opportunity to make impact on kids at a very young age so that's something on the axis of strange I mean there's two stories I can relate one is one day someone linked me to a video and the alarm clock I designed had sprouted legs and was walking because someone had gone and taken the plans and put legs on it and it started walking around that's pretty strange to see your design walk that way I would say strange probably more from the pragmatic sense one of the things I didn't expect that would happen is that when I put my schematics in quotations were manufacturing for lots of people so people were running because normally when you start business you have to sign an NDA you have to exchange all kinds of documentation all sorts of stuff and there's a lot of barriers finding the true price the market becomes very inefficient people would come to me and say oh you're using this health accelerometer you should use mine it's cheaper and I say well what's your price and then I talk to them and they say everyone it's sort of the plane the plane feels clear everyone knows what everyone is doing you actually get a lot of control of the process because all the other guys know the other guys know that they see the same bomb they see the same pricing so that was one of the I guess less expected benefits that's going open by going open source have you guys heard the term mashup where you take multiple songs and you mash them up by kind of releasing our files from different hardware we're seeing these fantastic mashups we sell the bits and pieces to folks and then they come up with a new product and then they use our files mash them together and create a product that never would have been a consumer product before I have countless examples that are all just hilarious that I wish they were consumer products but there's only one or two people in this world that need that product and so that's why open source helps it is no longer a product for all consumers it is each consumer can have their own product and so I think open source hardware allows for that nicely two quick stories so the first is that I think my project that I've been working on and talking about in this context is an outlier kind of weird one for some other open source hardware folks so I remixed an existing hardware design for the Arduino and turned it into a sewable piece of electronic so that was kind of a weird bizarre open to do so that's maybe the first story the second one was really unexpected and delightful to me is that the original designs for the sewable board that I did the lily pad Arduino was then taken and remixed by Chris Anderson from Wired and turned into the first board that he did when he was starting up DIY drones which was super cool I think they then went on to design things from scratch but that was such a cool like this and like thinking back and doing it all myself until I had kind of the first physical thing in the world and I said okay now I'm ready to take investment and I thought it was going to be actually I didn't think I didn't know if it was going to be impossible or going to be very easy I kind of had the ambivalent feeling so when I started raising money I started speaking to some investors and there were there's two reactions you get to that and in my experience it's really black and white it's either you're absolutely insane I don't know what you're talking about goodbye or this is awesome I think this is awesome I really want to support it so the people that I first started speaking to were people that were saying you're insane and it was a lot of them and I was going around in New York meeting investors and stuff like that and I kind of got depressed a bit and then I went on vacation to Beirut just for a week to hang out with my family and then one day I get an email from someone I know in another context but who was the ex CEO he was CEO of Creative Commons at the time and big big believer, Joey so big big believer in open source and he basically told me are you raising money and I said yes and you know anyone interested I didn't think that he would be and he said yes me and he ended up being my lead investor and then through Joey started meeting other investors that believe in that same mission and so it became the open source gauge became a way to kind of to weed out the investors that I I'm not going to see eye to eye with anyway so it's better that you know this is a conversation that happens quick and you get it over with and you speak to the people and they are in the same kind of camp as you and that was in September now we're actually launching another fundraise and I'm much better at knowing who to talk to from the beginning I look for that particularly it makes it harder because the pool of investors that I can talk to is much smaller and plus combining wanting somebody to believe in hardware as opposed to software and web plus believe in open hardware believe in you know kind of hardware that's predicated on having multiple products etc it makes the pool very very small but so when we hopefully find the investors they will be the perfect one I'm hopeful, I'm excited I think there's gonna be that's what opens our heart that's why I feel it's important I would just to dovetail it's not obvious people are passionate and passionate enough but they want to get really into it and go back a layer they're not satisfied with just what they got off the shelf they want to improve it somehow and the frustration that you get without closed source hardware is that at the moment you really love something and you want to get the note better it doesn't love you back because it's closed and you can't open it it has nasty labels on it and you're gonna get sued for opening it the great thing about open source is that it allows people with a passion to really and really do something that sort of adds to the community or does something really cool besides telling them that they could make a big shooting playing with the trampoline it's probably compelling in and of itself but how do you find more people who want to do who want to have that kind of control or ability to modify their devices obviously you do it in part for people who are already engineers or are engineering in part who here doesn't want to modify something around them who here doesn't get aggravated by the devices that they use that the chain on their bicycle is long enough for squeaky or something I mean we all come across those problems I think by opening it up we at least give you the chance of fixing it yourself or modifying it to become what you want it to be within that the broad kind of hobbyist landscape also there are I mean almost everyone does some sort of creative thing almost everyone that I know whether that's flower arranging or knitting or building crazy electronics or woodworking and I think that's the impulse that this movement taps into and in thinking about the broad kind of hobbyist market we can think about places like you know hobby lobby and the woodworking store and Joanne's fabric and in addition to radio shack so I don't I mean to reiterate with some of what we've been saying already I don't think we have to be confined to electronic electronic spaces or I mean although in addition I think there's room for the electronic spaces to grow into some of these other communities as well so yeah there's still many places to go even if we just stay in the hobbyist kind of creative person it's a strange word I mean I was doing some part of the fun of raising money you have to like price the market so I was like trying to size what the hobbyist market is and it appeared to be a very small market it's like a 30 million dollar market or something and for example I would have hobby electronics because like hobby lobby is no no of course you and electronics particularly which is supposedly what I was trying to like pitch to but for example I would not be included in that market and after I started reading more and more I was like how can I be you know there are all these assumptions that are made that I think are totally wrong and that's why it appears to be small it's because the labeling is weird and when even before it became a product there was a page that I called DreamBits and it was one line of text that you could write in what is a what would you like to invent what is a little bit that you would like to see made and I never thought anybody would really put things in it I thought I had to seed it and all of that and every day now we have tens and hundreds of submissions things that really like you would not even imagine from people who are retired engineers people who used to be in the Navy kids who are doing choir practice and they came up with an idea for something, stay at home mom there's really all sorts of ideas from like I want to build a triple axis accelerometer or like a hover bit too I want to make a fire alarm you know so there's just and the person who said I want to make a fire alarm may or may not be able to make it and they're not going to be in that category you know they're not going to be called that but it's just I don't think I mean I kind of really disagree with that sort of you know compartmentalization of people I think people don't dare to call themselves inventors but everybody essentially is I think also sort of this notion that there's like this discovery of the hobby market is sort of a sign of how I guess like first world this country is because like it's sort of like the thing I saw Wally where like the people forgot how to walk because they always had these things that shoved them around on the spaceship and then they have to eventually discover what if you go to other countries right I mean just fixing stuff yourself is just the way it is right I mean you know people have the cars in Cuba from like the 1930s and they're still running because they have to fix it themselves they have no other option because the ecosystem is so close to them you go to any any country where you know you don't have this wonderful service economy and everything sort of works everything's beautiful it's just a survival skill to be a hobbyist everyone is sort of a hobbyist right in those countries and so I think people are discovering actually that it's very natural for us to be that type of way we're all sort of cavemen in our own way and we draw on walls and we innovate and that's very, it's very native to it the way we think so I think it's a potentially very huge market it's just a matter of sort of relabeling and understanding that this is actually a very natural thing to do it's not sort of a curiosity geek weird thing just to give another small a little bit of an indicator of how and where these things are reaching a woman contacted me recently she's really into dog shows and so she shows her dogs and she dresses up her dogs in costumes and so she was in touch to see how she could kind of embed electronics into these costumes that she was making for her dogs so a kind of crazy out of the blue connection that I never would have thought would ever think really pets would be but so yeah, there's all sorts of stuff happening out there so to ask you half an hour ago if there were any strange or unexpected things you'd already been crazy and now you have dogs and trampolines that you fire and uh part of our when you when you look at the world are there spaces that you think lend themselves more or less to open source hardware are there areas that you say this is an obvious furlough place or even this is a place that maybe we want to tread lightly and that'll be the fourth or fifth round of areas that open up open source hardware or is it kind of a anything you know in this situation anything that you can sort of attach a design file to trades nicely in the open source so this table if it had a design file we could transmit that and kind of share that anything that um like the medical world like medicine I don't know that that's the right place for open source hardware that would be a fourth or fifth generation application yeah I could definitely agree safety and health there's functional and warranty issues there that would definitely be yeah somebody has to be liable you want to make sure it's working well but it's sort of like you don't go to a plumber to get your heart fixed so it's um but uh I generally think that everything that is unlike software where it's all intangible anything that's hardware is measurable and reverse engineerable so even if you don't think it's open right so the question I would turn on the other way is there anything that cannot be open that is closed and I think everything that is closed can be open anyways it's a matter of will interest and so you know why not just let's cut to the chase and just shift the schematic to the anyways it's able to allow trouble so we talk a little bit about your community the big part of the hardware is the larger community but then with any company you have a community that you're fostering that you know you're dealing with that are your most rabid users are the ones who give you those ideas who give you that feedback who dress their dogs up with the clothes that light up how do you think about that community and how much time I mean resources that you put behind just fostering that community for the fostering thing for the community thing I think for that's an interesting question because it doesn't it isn't necessarily specific to the open source hardware world my business fosters its community very very carefully because our customers are the most important thing and so just with any company that sort of engages them on the forum or answers the phone call or sends a nice email that's really important to business so beyond that I think the open source community is a little interesting because they all play nicely together and they all have this want to share you know they ask anybody about their project and they'll talk all day about the thing that they're building because they really want to show you what they're working on so I think part of it is business aspect and then the other half is the community who really loves to interact as a different and much smaller scale that kind of take on that question being one person supporting a project initially the project launched I was super psyched to get feedback from the community and getting emails from people hearing about the project and helping them troubleshoot was like super fun and awesome and then a couple of months go by you get like the same email like five times and you're like well this is what you need to do and then just like after a while it's like I really can't spend any more time doing it and I kind of just stopped and the community at that point was large enough and kind of robust enough to pick up the slack and that has been an interesting experience I mean in large part now people probably go to Nathan and go to the Arduino forums but that's been as like a small scale participant just in this universe an individual the community picked up a lot of that support slack that I wasn't able to provide and finally there was a little I mentioned in the last panel this is the business panel I wanted to bring up with you being open source hardware is being open source hardware but isn't necessarily being open everything hardware you don't share every single thing you don't necessarily tell anyone where the best suppliers are so how do you try how do you block that line how do you decide what you share and what you don't share and what is the what kind of feedback do you get when you make that sort of decision I've had to answer that question a couple times and what I've boiled it down to was whatever doesn't benefit the end user we're going to be generally less transparent about so the design files will allow you to be more successful building that which is but getting the spark fund financials right that doesn't being transparent about the business financials doesn't help you succeed as an end user so depending on we are more transparent as it helps our end user more likely to succeed yeah I think the analogy I like to use is hardware is the lens through which the designers creativity is focused on the user so to the extent that you want to create a dialogue between the user and the designer and get the feedback you want to make the lens transparent so everything that the user can hold in their hand is something you want to share with them to be able to look back and see what the original was you can answer whatever question I just remembered that the question was asking the last panel and I wanted to say something so I'm going to I want to say the first and the question was asked about kind of the role of policy makers and the law and you know what is specifically in the context of manufacturing and the power of manufacturing in the US etc I'm always interested in these, I used to be interested in these discussions that happened about what's happening now that China's taking over manufacturing in the world and what is the role of the US etc and I don't want to turn that into this discussion but I want to say that you know the US has lost has lost it's not losing, has lost its power to manufacture it's really it's paper thin now no no I'm talking the industry I think it's important to kind of face things and accept them and that's how you can change them because right now in January I tried to make 2,000 little kids and it was Chinese New Year and it was the hardest thing I think throughout the 4 years of me working on little kids that month it was the hardest month of my life because we were, we couldn't find these products that could do it we couldn't find the quality that we wanted we couldn't find the know-how that we needed maybe it was especially us but at that point we were a funded company we have money, we have time if we couldn't do it of course like a person that's an individual couldn't do it and so I just want to say that you know we have to accept that fact now and it's not that open source hardware is important or it's nice or it's cool it's urgent, it is crucial and I'm not American but I really believe in this and I think it's really important for America to get this back because this is the only way that the country will gain back it's sort of agility and it's innovation and it's creativity and impact on the world is through this channel because the system, the infrastructure that's in place is not working and has kind of lost us a lot of these skills and so you know really the policy makers and the law on the side of this goal as opposed to the side of corporations because you know like we saw in banks one corporation fails, everything fails you can't hedge your bets on large corporations it has to be kind of the larger goal and so I just want to say that this is you know it's nice and it's all happy, go lucky and everything but I personally believe that it's crucial and it's the only shot we got and we have to focus, we have to help each other do this and whether American or not we have to help each other do this and kind of save the country I would say I strongly agree with your sentiment I've moved to Asia unfortunately this country is kind of desolate in terms of hardware I think every policy maker in the United States needs to get a ticket to Shenzhen and you stand on the bridge of Hachanbe and go holy shit we're going to get our assets handed to us these guys are so every visceral your whole body gets filled with the commercial energy of that place and the innovation and the energy everyone there is just focused on building business and trade and so forth there's no place in America that has that feel anymore about it we're so gentrified I don't know what it is, I haven't figured it out but that ecosystem doesn't exist here and for all the value we may have about their poor IP protection a lot of the reason why they have this ecosystem is because they don't have to worry about copying stuff really every day that I worry about somebody copying me that I go after somebody who's copied my design is one less day that I'm working on the next big thing yeah it's just a distraction so we just face forward and put our head down and go and those guys out there just go ahead and say this guy is making a block I'm going to make a block and we're just going to do it and we're going to compete and they managed to scratch money out of hard earth because this very little IP protection you also have very little protection for your own investment into the thing everyone's sort of flying without a safety harness out there that really makes everyone really get pedal to the metal and really engage and work hard on the other hand there's this notion in the US that you can create protectable businesses in the heart of every venture capitalist beats a monopolist they want a monopoly that's why they're investing they want a protectable monopoly they want a hockey stick through copyright they want a monopoly through proprietary lock-in they want a monopoly through crypto keys on their devices like everyone wants protectable businesses because it's more profitable it's more safe you don't have to work as hard to protect these things and the US has a great system of laws that actually can you know allow these monopolies to exist and that sort of runs counter to a lot of I mean the open hardware is sort of no mistake we're a bunch of sort of viewed as maybe friend or smaller because we're not part of that larger we don't have incumbent businesses we're trying to protect we're trying to grow new businesses and we want to create ecosystems we want low barriers to entry and so forth and so it's not that I'm anti-victitious I love big businesses they provide me lots of good things but I bet at some point in time there is going to be sort of a confluence of sort of conflict of interest between what some small companies want to do versus what big businesses want to do especially as open hardware becomes bigger and more gets a bigger footprint and that's where I think legislation really starts to matter is to be able to protect the interests of smaller firms and to not have small animators overwhelmed with legal paperwork and protection and all this sort of stuff I mean we were talking with one piece of advice I gave them I said consider that you need to plan on taking 5-10% of all your revenue and spend as a tax to protect your business hire a lawyer, get insurance but you should always budget some amount of money essentially as a tax sort of it's not really a real tax it's not legislated but if you don't have a lawyer if you don't have insurance you're going to get wiped out you're really flying without a parachute I mean they're really really expensive compared to prototyping and so forth and you have to sort of budget this money to do it and that's a burden upon small business owners and a lot of small business owners who didn't have the foresight to get a lawyer or to get insurance will find themselves burdened sometimes on the road and they just flame out and go out of business and that's a problem I really want to thank you for putting this together I think it's really important and hopefully there are people in the room that can start to effect change in this way but I think at every juncture over the past while the law has chosen to side with big businesses because they've been very good at providing metrics at saying we employ X amount of people we turn around X amount of revenue we