Business Model Canvas


#1

Session Title: Business Model Canvas

Date: March 24, 9:30

Facilitators: Tara and Greg

Attendees:

  • Shingo Hisakana
  • André M. Chagas
  • Thomas Maillart
  • Leonardo
  • Tarumina
  • Alexis C. Johnson
  • Yuenyoung (Ake) Nilsian
  • Rafael Pezzi
  • Nur Akbar Arofatullah

Overview of topic:

Hands on workshop on drafting business models. Discussion on the elements of the Business model canvas (template) adapted for open source business from Strategyzer.com.

Notes:

Starting with introductory video and visiting the source of the Business Model Canvas at strategyzer.com: https://strategyzer.com/canvas/business-model-canvas

Tara shared a modified business model canvas adapted for open source, can be found here. More info about this adaptation can be found here.

Greg points to the importance of aligning the advantages of open source with making revenue.

Examples of problem statements:

What problem tweeter is solving? Quick exchange of messages.

Trans people do not have space in science and technology in Germany.

Farmers want alternatives to pesticides in Indonesia.

Make easer for consumers with food allergy to know what’s in their food.

Case study: Organic Rice Farming in Jogjakarta

Let’s make the problem more specific

Problem: Improve the adoption of organic pesticides by rice farmers in Jogjakarta. Organic pesticides are hard to apply, preventing wide adoption.

Farmers do not like to use the pesticides and want to remove the pests in environmental safe ways, friendly, and cost effective, easy to apply.

Solution: Organic pesticide delivered with semi assisted pump. Adapting exiting open source design.

Value proposition:

  • Training:
  • how to apply
  • how to market the organic rice,
  • Increase yield with efficient pump

Channels:

  • Word of mouth
  • Community of farmers (local farmers associations)
  • Past relationships with these farmers (about 3 years ago)
  • Friends with ongoing contact with the farmers.
  • Hackerspace

It is important to define the person or group of people that will keep contact with the community and how to effectively use the available communication channels.

Adoption Criteria:

Size: 1000s of farmers

Costs and resources:

  • Pesticide exists
  • Logistics
  • Workshop
  • Pump
  • Check with the farmers how are they are applying the product and invite them for co-designing the pump.

#2

Borrowing from the National Public Radio (NPR) business model, promoting OSH, and help people reclaim their destiny.

(following discussion with André (@amchagas) & Greg (@test)

Over 40 years, NPR has built a userbase of donators, who have helped gain financial independence. While NPR was initially highly subsidized, only 3% of today’s budget comes from federal funding, making NPR essentially immune to looming defunding by the current US administration.

nb : To some extent US universities work the same (especially private ones): They earn funding grants (e.g., NSF) to bootstrap an emerging research field, which progressively gets internalized by direct funding from the institution (e.g., apppointment of a faculty). Yet, one may consider where money to pay for a faculty comes from. Most often, this funding comes from the endowment (more precisely from the interests paid out of the endowment), or from donations by alumnis, or persons who believe in a project, and are wealthy enough to support a chair.

What make NPR and Universities be so successful raising money? First, they raise money for non-profit goals. Second, these institutions embody the prospect of a better future. Not only by exposing or creating original knowledge, they bring hope, but also recipes for a better world. These recipes are actionable either immediately (e.g. NPR reporting on social innovation), in the near future (e.g., a new technology hitting the market), or towards a long-term horizon (e.g., a genomics discovery bringing up hope for genetic therapies).

Whether abstract or concrete, such knowledge artifacts have the potential to significantly change people’s life, and if it is for the best, people will adopt the innovation, either in mind (i.e., “be sold”), or very concretely by sourcing it.

Yet, adopting and sourcing artifacts is not like actually creating them. And this makes a big difference in people’s life. Not everyone can attend a top-tier university. Actually, in a world with growing inequalities, between riches and poors, residents of urban vs country areas, educated vs. less educated, and combined with globalization of mass markets, less people have an opportunity to make a significant impact changing their life, as well as their direct or less direct environment.

People see themselves having skrinking grasp on their life. A few decades ago, a farmer would have selected her own seeds, or tweaked her agricultural tools to fit own use. Today, mainly for reasons of economies of scales, farmers buy tractors fully ready to use, which they have no right to make changes to. As they used them, these tractors collect and transmit data to the manufacturer, who in turn is able to sell additional services associated with big data processing. Similarly, seeds get sourced in bundle with the corresponding pesticides. The farmer has merely and increasingly become a component of the value chain, and over time less an actor of her own personal and/or community achievement. Innovation capabilities have slipped out of her arms.

We contend that one reason for the political despair of populations - mainly outside large urban areas in Western countries - has something to do with people lacking having their destiny into their hands, besides increasing long-term uncertainty on future welfare.

Overcoming this problem is complex. One reason is that sense of purpose attrition is constantly ongoing driven by innovation: returns of scales brings more efficiency and reduce incentives for (resp. utility of) small innovative steps. One is left with the prospect of inventing disruptive technologies. Yet unless being extremely lucky, no one can alone disrupt a highly optimized & ingrained industry.

The problem faced by farmers – and with the rise of artificial intelligence, most workers doing repeated tasks – is reminiscent of the situation faced by the first computer hackers. Computers were proprietary black box, any change by the user required clearance from the manufacturer. Hackers first started challenging these systems and business models in the academic environment where a level of leniency existed. They also started cooperating and sharing their results early on. Eventually, the open approach got institutationalized with the open source software copyright regime. Not only open source hackers reclaimed their destiny by learning-by-doing software code, but they have also in large parts disrupted the software industry.

Software code is important, and open source software initiatives exist for farmers (e.g., Farmer OS). Yet, farmers work in the physical world and need to moreover develop hardware. Making collaboratively and sharing their designs online would be a way for communities of farmers to disrupt their industry, perhaps by inventing their own farming drones, which aerodynamics and power supply may be tuned to local climate conditions and agricultural goals. These innovations would at the same restore a deep sense of purpose, help people feel they help do something good for their community, for the world at broad, and perhaps earn bonus money.

How does this relate to donations to NPR or Universities? Actually, if the above proposition is valid, then those people which will have reclaimed their destiny, would be grateful for this, and either contribute further or donate. Here is a proposition for a business model for open hardware. In the pursuit of the expansion of its maker community, GOSH could setup shop this way, and use the return capital to further grow the open science hardware community endogenously, while maintaining high ethical standards.

The same principles should hold and work similarly for any open science hardware project, and indeed, many projects use this approach.

There are problems however: farmers who are squeezed by the big industry and by increasing returns of scale, have little own (time) resources for learning-by-doing, which arguably takes a significant amount of time. For less educated people the learning curve may be even steeper, and one should not overexpect from anyone, because it would definitely crowd out motivation.

We believe that some sweet spots exist, which would be the right place to start (e.g., some farmers are highly educated and decided to do this job by passion, some other enjoy above average return on capital and wealth) Considerations on minimizing input capital (e.g., equipment needed, first streak of software code production) are also critical to maximize the chances of success of such business models. Also minimizing input capital per project increases the possbility to seed-fund more initiatives (following real-option theory), and as such overall chance of success of a global paradigm change from top-down to horizontal and/or bottom-up hardware innovation.

[to be continued]


#3

Hi, I cannot wait:smiling_imp:
since your are working on a “business model”, I want to share with you my working paper (in english). I advice you to look the second part of the paper, I think there is some critical element there that you have to consider.

Mboa Nkoudou, Thomas Hervé. (2017, March 24). Benefits and the hidden face of the maker movement: Thoughts on its appropriation in African context. Zenodo. http://doi.org/10.5281/zenodo.438077