How Open Source and Crowdfunding Are Creating a New Business Niche – Who benefits?

By on September 25, 2015
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A modular laptop built with a Raspberry Pi. An ergonomic, programmable, mechanical keyboard made from slabs of maple, so it looks like a solid-state electric guitar.

A device that plugs into a wall socket that allows you to control devices from your smart phone.

What do these and hundreds of other devices – from wearable tech to portable solar chargers – have in common?

First, all of them are being crowdfunded. Second, many are being boot-strapped with open source software.

A different point of view about new increasing trends: open source, crowdfunding, mini-entrepreneurship. Given that most of the open source project are moving to crowdfunding as primary source for funding, and their impact on people is really inspiring, it is not so sure that the business development will bring to better wealth for all.

The advantages of open source are much the same for the mini-entrepreneurs as for any startups. By using free-licensed code, both can focus on developing their unique code, instead of reproducing what others have already done. The preliminaries have already been done for them.

This advantage can mean that fewer employees are needed, and that more advanced features are included in the latest release. It can also mean a quicker time to market and profitability. Where conventional investors are lucky to receive a return in five years, those with a stake in a company whose products are built on open source might profit two or three years earlier.

More importantly, however, without the convergence of crowdsourcing and open source, many of the mini-entrepreneurs would probably not be operating at all.

Given the similarities to microcredit, mini-entrepreneurship might be seen as a means to help developing countries build their technical infrastructure. That may be happening, but if the obligatory introductory videos to projects are any indication, most of the participants are North American or European.

Far from assisting development, if anything the current round of mini- entrepreneurship appears to be producing luxury goods. Some projects, like the Pi-Top laptop, are reasonably priced for what they are. Far more, however, are priced at a premium.


Source: How Open Source and Crowdfunding Are Creating a New Business Niche

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