May 11, 2014
Blog All Dog-eared Pages: Makers
It was familiar territory for me, but good to have it all pulled together in one place. Here are my notes from reading it...
The beauty of the Web is that it democratized the tools both of invention and of production. Anyone with an idea for a service can turn it into a product with some software code...
Small business has always been the biggest source of new jobs in America. But too few of them are innovative and too many are strictly local - dry cleaners, pizza franchises, corner groceries, and the like, all of which are hard to grow. The great opportunity in the new Maker Movement is the ability to be both small and global. Both artisanal and innovative. Both high-tech and low-cost. Starting small but getting big. And, most of all, creating the sort of products that the world wants but doesn't know it yet, because those products don't fit neatly into the mass economics of the old model.
A service economy is all well and good, but eliminate manufacturing and you're a nation of bankers, burger flippers, and tour guides.
Our modern expectation of continual growth and improving quality of life is just a few hundred years old. Before that, things stayed more or less the same, which is to say pretty bad, for thousands of years.
The machines are running again on the Mersey.
Under somewhat different historical conditions [i.e. had the 20th C played out differently], firms using a combination of craft skill and flexible equipment might have played a central role in modern economic life - instead of giving way, in almost all sectors of manufacturing, to corporations based on mass production. Had this line of mechanized craft production prevailed, we might today think of manufacturing firms as linked to particular communities rather than as independent organizations that, through mass production, seem omnipresent.
This [shift from mass, to personal manufacturing] is just like the shift from mainframes to personal computers. They weren't used for the same thing - personal computers are not there for inventory and payroll. Instead personal computers were used for personal things, from e-mail to video games. The same will be true for personal fabrication.
What entrepreneurs quickly learn is that they need to price their product at least 2.3 times its cost to allow for at least one 50 percent margin for them and another 50 percent margin for their retailers (1.5 x 1.5 = 2.25). That first 50 percent margin for the entrepreneur is really mostly covering the hidden costs of doing business at a scale that they hadn't thought of when they first started, from the employees that they didn't think they'd have to hire to the insurance they didn't think they'd need to take out and the customer support and returns they never expected.
Finally, the tricky matter of whether to pay volunteers: I'm in favor of offering key contributors to a product a royalty, but don't be surprised if they decline. The reasons can be many: they're not in it for the money; the absolute payment amounts are tiny compared to what they make in their day jobs; they feel it's wrong taking payments when others who contributed don't; and finally, when they realize that any royalty you pay will lead to higher prices for consumers, they decline simply because this conflicts with the real reason they contributed which is to create something that can reach the largest audience possible, and higher prices mean fewer users.
But at the end of the day, the Maker Movement will be judged not just on how it can change product categories and entrepreneurial fortunes, but also on how much it can move the needle for an entire economy.
Ford, for one, is already paying attention. In early 2012, it worked with TechShop to bring one of the shared Making facilities to its home city. The Detroit TechShop is huge, at 17,000 square feet, and is stocked with $750,000 worth of laser cutters, 3-D printers, and CNC machine tools. Ford employees are free to use the space day or night for projects related to their work or personal projects, and Ford intends to give out 2,000 memberships in the first year.
Wonder if Jaguar Land Rover want to give out some DoES Liverpool memberships? ;-)
Page 138, about Tesla Motors
So, too, for the supply chain. Musk is a zealot about bringing as much fabrication as possible in-house, and he's got the experience to know how to do it.
The labor arbitrage view of global trade, a model that goes back to the dawn of the First Industrial Revolution, assumes that manufacturing will always flow to low-cost countries. But the new automation view suggests that the advantage of cheap labor are shrinking while other factors - closeness to the ultimate consumer, transportation costs (including possible carbon taxes), flexibility, quality, and reliability - are rising.Posted by Adrian at May 11, 2014 11:00 PM | TrackBack