Crowdfunding and community design deliver custom-built embedded systems

2Although possibly inexpensive on a unit-cost basis, designing embedded systems can be costly and intricate. As design tools become less expensive and more widely used, these development costs are dropping to a fraction of their former magnitude. Low-volume usage and even hobbyist customers nevertheless still find the associated development costs beyond their individual reach. The advent of crowdfunding platforms, in addition to community-driven embedded electronics design, makes it possible to promote innovation while enhancing the affordability and accessibility of custom embedded devices.

In the March edition of the Harvard Business Review, Richard D’Aveni, Dartmouth College’s Bakala Professor of Strategy, published the article “3-D printing will change the world.” His vision? That “as applications of [3D printing] technology expand and prices drop, the first big implication is that more goods will be manufactured at or close to their point of purchase or consumption” and “that goods will be infinitely more customized, because altering them won’t require retooling, only tweaking in the instructions in the software.”

D’Aveni’s vision is on its way toward reality. It even foresees consumers making products in their own homes using design plans bought on the Internet. The fulfillment of that prediction, however, hinges on one thing: 3D printers being affordable and practical for the average consumer. While 3D printing has been around for a while, the devices have historically had such a high development cost that their final price tag has left them out of reach for consumers.

However, Staples has begun stocking 3D printers in their stores as of this past June. The price tag on Staples’ printer, at $1299.99, is just a fraction of the tens of thousands of dollars the devices previously cost. The drastic price reduction still leaves 3D printers out of reach for all but the wealthiest consumers. The conventional model of product development means that the manufacturer, 3D Systems, has developed, tested, and manufactured the Cube 3D as a generic device capable of doing many things very well, thus appealing to a wide array of purchasers, with a price tag reflecting its functionality.

An alternative to sole ownership of the product development cycle has recently emerged and become popular for everything from 3D printers to music boxes to Arduino-driven robotics: . Within the 3D printing sector alone, many entrepreneurs have been able to develop feasible, working printers that are extremely focused on a specific subset of users via community-driven crowdfunding platforms like Kickstarter (www.kickstarter.com). An example of this is The Buccaneer 3D printer on Kickstarter, developed by Pirate3D, Inc. of Palo Alto. Its creators have developed a functional, user friendly device designed for home users with little to no knowledge of computer-aided design. The Buccaneer has raised almost $1 million in pledges from more than 2,000 backers, well above its initial $100,000 goal. The minimum pledge required to receive a Buccaneer 3D printer? Just $347, just slightly more than one-quarter of the cost of the device offered by Staples.

3D printing is a good example of the shift to crowdfunding. It is also a domain that is uniquely intertwined with embedded systems. Designers of embedded systems, especially hobbyists, have always needed to be able to create cases and form factors as unique as the hardware within. Printers like the Buccaneer offer this potential, and by tailoring the functionality of a device to the exact needs of a particular community, creators of any crowdfunded device are able to offer that device at a fraction of the cost of devices that have features the target users will never need. The development cost, however, incurred in creating a device like the Buccaneer is comparable to creating one like the Cube 3D. How, then, is it possible that the former costs four times less than the latter?

The answer lies in identifying a community of users for that specific device. The cost of creating a project idea is not substantially different between the two models, but by identifying interested users beforehand, asking them to pledge the desired amount (remember, a supporter only pays if the campaign is successful), and delivering an initial run of products “on demand” to the early adopters, project creators can cut out the middlemen and the associated costs. The risk of a campaign supporter losing money or not receiving the promised product is very low, since crowdfunding platforms generally screen posted projects for plausibility. Kickstarter, for example, has stringent criteria for projects posted on its site, regulated by a selection committee. While Kickstarter does not guarantee projects themselves, its Terms of Use require project creators to fulfill their project’s obligations to all backers, or refund any backers whose obligations cannot be fulfilled. Funding is all-or-nothing: A project either gets all of its needed funding, or backers get all of their pledge returned.

What is community design?

Crowdfunding brings new potential to a wide array of projects, especially those in technology. Open source hardware projects are nothing new. The Arduino, Gumstix, and BeagleBoard are all examples of the many established projects geared toward a hobbyist community. Schematics for all of these projects are freely and readily available online, and there is an active community of enthusiasts developing embedded solutions with each platform and collaborating with each other.

Customization, however, is technically challenging for obvious reasons. Anyone wishing to build upon the hardware platform offered by these projects needs to have an advanced knowledge of electrical design to extend or modify it in any way. This isn’t a problem for electrical engineers, but hobbyist roboticists or embedded engineers specializing in software might not have the same degree of knowledge. These users are able to ask for help from the community, and are able to reuse solutions developed by other community members as platform extensions in their own projects. This, in essence, is the heart of community-driven design.

Reusing solutions developed by other community members is becoming increasingly feasible as better design tools become available. Gumstix’s Geppetto Web-based development platform is one such tool, allowing users to design customized embedded devices with virtually no knowledge of electrical design. A core component of this system is its community feature, where a user can choose to share a design they have created with the community. Any other user is free to copy that design, modify it, use parts of it, or order it themselves. Completed designs can be submitted for manufacturing and are delivered within three weeks.

Crowdfunding community designs

In addition to the customization challenges discussed, another primary concern for hobbyists and other low-volume users of embedded designs is development cost, in terms of money and time. Developing a quality solution by traditional means is not a simple task and requires a significant investment of time and money in realizing an actual product. By sourcing the design and manufacturing onto systems like Geppetto, both of these factors are significantly reduced. In many cases, manufacturing a one-off design by traditional means has a setup cost upwards of $10,000, compared to approximately $1,999 with an intuitive design application.

To an individual customer, like a hobbyist, this number still seems quite high. At such a low volume, it is still extremely difficult to offset the engineering cost associated with ensuring that a design is functional and well built. This is where crowdfunding becomes advantageous, because a design that is interesting to one hobbyist is also likely to be interesting to another. Instead of each paying the associated setup fees and unit costs, one of the two hobbyists can create a campaign for their design to see if anyone is interested in sharing the costs. If someone is interested in purchasing the design as well, the setup fee is divided proportional to the number of units purchased and then each customer pays for their desired quantity of boards.

As an example (see Figure 1), a customer named Bob can create a design with a $50.18 unit cost and run a campaign for it. Bob wants to buy 5 of the boards himself. Carol and Alice see Bob’s design, and Carol decides to buy 3 while Alice buys 2 of the boards. The total setup cost is $1,999, which is divided among Carol, Alice, and Bob according to the percentage of the number of boards they purchased relative to the project’s total of 10 boards. Thus, because Bob’s 5 boards represent 50 percent of the project’s total number of units ordered (10 boards), he pays 50 percent of the $1,999 setup fee plus the cost of his 5 boards at $50.18 each, amounting to $1,250.40. Carol’s quantity of 3 boards, constituting 30 percent of the total of 10 project boards ordered, means she pays 30 percent of the setup fee plus the unit costs for 3 boards, totaling $750.24. Alice’s fees are figured in like fashion at 20 percent and 2 boards, totaling $500.16.

Similarly, community members can not only collaboratively design embedded applications, but are also able to leverage their collective buying power when enough interested parties participate: The campaigns are designed so that above a threshold of participants, the setup fee will be waived altogether and customers only pay for the quantity of boards they desire. This is because, at a sufficiently high volume, the manufacturer is able to assume the development cost of a popular product.

21
Figure 1: A breakdown of the cost for a sample community design. This campaign has three participants interested in purchasing a total of 10 units.
(Click graphic to zoom by 1.9x)

Embedded designers, hobbyists benefit

By designing and collaborating online, designers and users of custom, embedded applications have gained the advantages of sharing their time-saving solutions and innovations while also sharing the cost of making them a reality. With many of the barriers related to funding and manufacturing removed, the embedded computing space is poised to explode with creativity. Just as 3D printing is pre-dicted to change the world of manufacturing, community-driven and intuitive embedded design will change the way hobbyists and professionals think about electronic design.

Dr. W. Gordon Kruberg, President and CEO, founded Gumstix in 2003. He has been involved in more than 30 U.S.-based companies as a venture investor, member of the board of directors, or executive teammember. He was also CEO of Deersoft, acquired by Network Associates, and spent seven years with Grace Horn Ventures. He holds an AB degree in Human Biology, an MS degree in Industrial Engineering from Stanford University, and an MD degree from Northwestern University.

Andrew Simpson is a content developer and writer at Gumstix. He has an avid interest in technology and open source development. Since joining Gumstix in 2012, he has published numerous and tutorials on embedded systems. He holds a Bachelor’s degree in English from the University of British Columbia.

Gumstix www.gumstix.com

Follow: Twitter Facebook Google+ LinkedIn YouTube

Topics covered in this article