Open Source and the Future of Capitalism

MIT physicist Richard Morley once quipped how innovation happens: “In order to see the solar system as it is, Copernicus had to be standing on the sun.”
That analogy serves as the title of the book Standing on the Sun by Christopher Meyer and Julia Kirby, which gives a big-picture view on how capitalism is changing and how those changes are impacting businesses. Even though the book seems to focus on large markets and corporations (and reading this text can feel like heavy lifting), there are nonetheless some profound points that small business owners can use to prepare for coming changes.
Here are a few key points from the book.
Open Source Doesn’t Equal Free
If your company is in the software or hardware development game, open source may feel like a drag on your profitability. But according to Meyer and Kirby, although open source software and hardware often follows a "freemium" model, that doesn't mean you can’t make money. There are lots of software companies that have an open source product and then build on it with a more advanced version that customers purchase.
Standing on the Sun, espouses this collaborative, interconnected way of the future by citing numerous international examples of technology being used in unexpected ways. For example, it shows how mobile phones “power” a village by giving merchants access to local and national markets. Another example is the U.S.-based small business Adafruit, a DIY electronics kit maker, which encourages its community (with a cash reward) to hack the Microsoft Kinect system with an open source driver. Microsoft objected at first until it realized this sort of collaboration could benefit its systems, too. You can read the full post here.
Faster Product Development via Makerspaces
Another way the open source movement is benefiting small business is in prototyping. The good news is that you don't have to invest $20,000 in a laser cutter or high-end 3D printer for prototyping. You can join a makerspace, hackerspace, or an open access public workshop like TechShop (although there are only five across the country right now). Many start-up small businesses are leveraging these technologies by purchasing, leasing or joining a community space where they get access to tools and machines.
Square, the credit card processing device for mobile phones, was prototyped in the California TechShop in about two weeks. This is also an example of “reshoring,” where large and small companies bring their manufacturing operations back to the United States from China. Prototyping the Square device overseas would have been both cost- and time-prohibitive for the inventors. Thus we are seeing an evolution toward small urban manufacturing that makes it easier to produce locally. (Check out my OPEN Forum post 13 Ways to Create Products in Real Time, for more on devices that help you create prototypes or even working products.)
Using Hashtags in Your Marketing
Tagging content on your site makes it possible for like-minded individuals to connect and makes tracking social media a bit easier. Not to mention that like open source software, it is free to employ. Meyer and Kirby suggest one or two hashtags in each chapter to spur online conversation. Think about your marketing pieces, your blog posts, your events and how you could add simple hashtags for people to use on Twitter and Facebook.
The world economy, like everything in life, is always in motion and always changing. We don’t always notice it until enough change has taken place. Thanks to Standing on the Sun, we can catch a real glimpse of the future of capitalism and small business.

08:49 by Robert dawne · 0

Is Manufacturing the New Black?

For years, news about the manufacturing sector in the U.S. has been bleak, punctuated by tales of factory closings and outsourced production. But in the beginning of January, the Labor Department offered a little glimmer of hope. It seems that manufacturing companies have been adding jobs for the past two years. No, we’ll never beat China when it comes to stocking the shelves with mass produced commodities at Walmart, but we do a pretty good job of turning out high-quality goods for niche markets. And guess what?  The “Made in America” label is increasingly enticing to consumers, and can be a competitive edge for entrepreneurial companies.
Take, for instance, New Orleans-based Jolie & Elizabeth, started by Jolie Bensen, 28, and Sarah Elizabeth Dewey, 24, two southern girls who met at BCBG in Manhattan. When the two decided to start their own company, they hit the road for Bensen’s home turf of New Orleans—far from the hyper-competitive fashion scene in New York and Los Angeles. With Bensen as the chief designer and Dewey handling sales and marketing, the two launched their line in the Spring of 2010 with help from a manufacturing partner in New Orleans East. “The factory was really hurt by Katrina and was about to shut down,” recalls Bensen. “We begged them to let us help them.” The owners agreed and the young partners got cracking on their first line.
Today, says Bensen, Jolie & Elizabeth, which makes feminine, functional dresses with a Southern-girl flair, is “one of the only completely vertically integrated clothing companies in the South.”  The company has six-figure revenues, a growing network of retailers and, say the partners, a strong commitment to remaining in New Orleans—where their dresses now account for 45 percent of production at their manufacturing facility.  “At BCBG, we saw that if you wanted to change something minor, you just couldn’t get it done,” says Bensen, referring to the downside of manufacturing overseas.  “And if they make a mistake, then you get 700 of the wrong dress.” Bensen and Dewey, on the other hand, are at their factory almost every day to keep a close eye on production. If a button needs to be moved, or the length of a sleeve changed, then adjustments can be made without the communications snafus that frequently come with distant partners.
From a brand and marketing standpoint, the company’s New Orleans roots give it a strong point of differentiation. “We have a 'Made in Louisiana' label in every dress, and that’s one of our best sales strategies,” says Dewey.  “We sell to some boutiques that only carry products made in the U.S., and I think we’ll see more and more retailers favoring goods made here.” Jolie & Elizabeth dresses are now carried by 30-plus retailers and revenue for their fall and winter collection doubled over last spring.  Bensen and Dewey also speak frequently to girls at southern high schools and universities, hoping to spread the word that the south is a great breeding ground for young designers, and that manufacturing at home helps build local economies.

07:46 by Robert dawne · 0