Businessweek Predicts “Culture Clash” Between Open Source and VCs

Businessweek Predicts “Culture Clash” Between Open Source and VCs

Bloomsberg Businessweek has a piece on the maker movement, its drift into the mainstream, and its attracting of venture capital interest. The usual suspects are here: MAKE, Maker Faire, Adafruit, MakerBot, DIYDrones (3D Robotics), and some are quoted. The surprising twist is that, after extolling the virtues of open source and the maker community that’s spawned it, the piece suggests that real money can’t come to open source hardware businesses (that whole giving stuff away part), and that OSH will likely be a hard sell to investors. The first suggestion runs counter to the experience of the very companies it quotes and the only example it gives of an actual VC experience is the Foundry Group’s $10 million dollar investment in MakerBot. And they quote Bre Pettis of MakerBot saying that Foundry Group gets it.

I’m not surprised that the only negative comment in the piece is by a venture firm that specializes in manufacturing. I wouldn’t expect them to be in the vanguard of open source investment. Foundry Group’s past investments include Zynga, the social network game developer. That’s the sort of direction one would suspect open source venture money to be coming from.

All that said, it’s encouraging to see the mainstream news and business media catching up with the maker movement. And it’s great that the wider business world is starting to take this space seriously.

The piece even contains a whopper of a quote from the Wharton economist Jeremy Rifkin:

“The maker movement is ‘as significant as the shift from agriculture to the early industrial era.'”

Wow. Take that, shift from industrial era to information age! (And take note of that, venture capital firms.)

The DIY ‘Maker Movement’ Meets the VCs

18 thoughts on “Businessweek Predicts “Culture Clash” Between Open Source and VCs

  1. Awasson says:

    What I find surprising is that this is viewed as something new. This is the maker renaissance. When I was a kid, I used to read all of my dad’s and grandfathers magazines. They had titles like “how to build 20 boats” (I kid you not), “radio electronics” “popular electronics”, “mechanics illustrated”, etc… These were the how to guides that regular guys (or gals) could follow to make things; radios, cars, scooters, boats, games and other gizmos.

    People are finally remembering how to make!

    1. Larry Farmer says:

      It’s so much folks “remembering” as it is new building techniques becoming available. I used to read those mag’s and after a while I got bored with instructions on how to build yet another chunky, boxy sailboat from plywood. Given that even “cheap” goods looked better than the projects in the mag’s (and were not significantly more expensive), I didn’t feel much enthusiasm for such a project.

      Now that techniques for working with newer materials have been developed and are more accessible, I’m seeing a lot more *interesting* projects. Add to this, decreasing material costs, wider availability and more “complete” electronic components and you have the makings of a renaissance.

      1. awasson says:

        Well, yes and know…

        I agree about the balance between remembering how to make and revolutionary new techniques enabling us to do more, better and faster. The tools and especially all of the open source hardware are unprecedented. I think this is partially because of the lowered costs, partially because of integrating computing power, and partially because I think our thinking has evolved to consider more angles when looking for solutions.

        I find it fascinating that using the same basic building blocks that were available in the 70’s, high school kids are able to design and build computing hardware that 40 years ago would taken an engineer to understand ( In that way, I think our thinking has really evolved.

        As far as looking at the projects of yesteryear as less than consumer ready, I think you’re wrong… Sure Mechanics Illustrated had a build project that detailed a boxy, plywood ATV sometime in the 60’s or 70’s but the boat building magazines I referenced from the 20’s actually had 20 plans in each issue that went from boxy cat rigged simple boats to open cockpit lake speedboats, to 40 foot luxury sailing sloops that would hold up against any boat today as far as style and sail-ability goes. The electronics magazines of days gone by were also on the edge of technology (of the day) and detailed useful projects for things that you would otherwise buy at Radio Shack, Best Buy, etc… That’s a hard one though because all of our consumer gadgets are really so cheap, you’d be hard pressed to find a good reason and/or the parts and plans to build your own “smart phone” or e-reader :-/

        Anyway, I’m glad to see this renaissance in know-how and with things like the Make Blocg, Maker Shed, Instructables, Hackaday and Kick Starter I expect we’ll see a lot more of it!

  2. Christian Restifo says:

    A few decades ago, investors would have called you crazy for thinking that people would actually buy computers for use at home. Too expensive! Too difficult! No real use for the home!

  3. morgauxo says:

    So? If all goes well with the maker movement we won’t need VCs, not when an average person can produce physical objects from their ideas in their own homes. A VC might be useful for skipping right to mass production but not necessary.

    1. Christopher Gosnell says:

      Exactly! The take away I got from the story is that some VC’s get is but most don’t.

      You may have to crowd source your funding through such things as Kickstarter. As a benefit, microfunding through Kickstarter may be easier than trying to get Big Bucks from a VC. You also have a ready market for your idea.

  4. rocketguy1701 says:

    Hopefully vested interests (not necessarily VC’s, in fact probably not VC’s) will be slow enough to realize the full impact, that their future efforts to inhibit progress will be ineffective. It’s not too early for the Maker community to think about a kickstarter to build a political action group to protect our rights from trolls though.

    You can have my 3D printer when you pry it from my cold dead hands. And after you defeat the security robot with a laser on it’s head.

  5. TJ McCue (@TJMcCue) says:

    I believe a whole new way of funding is coming (or here already) via crowdfunding (Kickstarter, IndieGoGo, RocketHub, Makible, and 20 others). VC’s like Brad Feld get it, but he is an anomaly (meant in a good way, Brad…). Most VCs are like regular bankers and are not as risk-tolerant as they claim. Again, no diss, there’s a place for VC money. I’m just unconvinced that VCs will be the way to see maker companies grow. It takes a rare breed to see the opportunity of funding a MakerBot or Adafruit or any one of a 1,000+ cool maker companies that are incubating today.

    Maker companies are simple, yet complex, right? They represent much of the future of capitalism — a capitalism that is more collaborative and less competitive. Maybe it won’t even be called capitalism, but Collaboratism… :-) There’s a lot going on here, Gareth, and I know I’m preaching to the choir… Thanks for a great post.

  6. Daniel says:

    Got to see the MakerBot in action at MegaCon (someone had one set up). And it was awesome to see. :D

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Gareth Branwyn is a freelance writer and the former Editorial Director of Maker Media. He is the author or editor of over a dozen books on technology, DIY, and geek culture. He is currently a contributor to Boing Boing, Wink Books, and Wink Fun. His free weekly-ish maker tips newsletter can be found at

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