Arduino is a for-profit open-source electronics platform and computer hardware and software company. Founded in 2005 in Italy.

Revenue model: charging for physical copies (sales of boards, modules, shields, and kits), licensing a trademark (fees paid by those who want to sell Arduino products using their name)

Interviewees: David Cuartielles and Tom Igoe, cofounders

In 2005, at the Interaction Design Institute Ivrea in northern Italy, teachers and students needed an easy way to use electronics and programming to quickly prototype design ideas. As musicians, artists, and designers, they needed a platform that didn’t require engineering expertise. A group of teachers and students, including Massimo Banzi, David Cuartielles, Tom Igoe, Gianluca Martino, and David Mellis, built a platform that combined different open technologies. They called it Arduino. The platform integrated software, hardware, microcontrollers, and electronics. All aspects of the platform were openly licensed: hardware designs and documentation with the Attribution-Share-Alike license (CC BY-SA), and software with the GNU General Public License.

Arduino boards are able to read inputs—light on a sensor, a finger on a button, or a Twitter message—and turn it into outputs—activating a motor, turning on an LED, publishing something online. You send a set of instructions to the microcontroller on the board by using the Arduino programming language and Arduino software (based on a piece of open-source software called Processing, a programming tool used to make visual art).

“The reasons for making Arduino open source are complicated,” Tom says. Partly it was about supporting flexibility. The open-source nature of Arduino empowers users to modify it and create a lot of different variations, adding on top of what the founders build. David says this “ended up strengthening the platform far beyond what we had even thought of building.”

For Tom another factor was the impending closure of the Ivrea design school. He’d seen other organizations close their doors and all their work and research just disappear. Open-sourcing ensured that Arduino would outlive the Ivrea closure. Persistence is one thing Tom really likes about open source. If key people leave, or a company shuts down, an open-source product lives on. In Tom’s view, “Open sourcing makes it easier to trust a

With the school closing, David and some of the other Arduino founders started a consulting firm and multidisciplinary design studio they called Tinker, in London. Tinker designed products and services that bridged the digital and the physical, and they taught people how to use new technologies in creative ways. Revenue from Tinker was invested in sustaining and enhancing Arduino.

For Tom, part of Arduino’s success is because the founders made themselves the first customer of their product. They made products they themselves personally wanted. It was a matter of “I need this thing,” not “If we make this, we’ll make a lot of money.” Tom notes that being your own first customer makes you more confident and convincing at selling your product.

Arduino’s business model has evolved over time—and Tom says model is a grandiose term for it. Originally, they just wanted to make a few boards and get them out into the world. They started out with two hundred boards, sold them, and made a little profit. They used that to make another thousand, which generated enough revenue to make five thousand. In the early days, they simply tried to generate enough funding to keep the venture going day to day. When they hit the ten thousand mark, they started to think about Arduino as a company. By then it was clear you can open-source the design but still manufacture the physical product. As long as it’s a quality product and sold at a reasonable price, people will buy it.

Arduino now has a worldwide community of makers—students, hobbyists, artists, programmers, and professionals. Arduino provides a wiki called Playground (a wiki is where all users can edit and add pages, contributing to and benefiting from collective research). People share code, circuit diagrams, tutorials, DIY instructions, and tips and tricks, and show off their projects. In addition, there’s a multilanguage discussion forum where users can get help using Arduino, discuss topics like robotics, and make suggestions for new Arduino product designs. As of January 2017, 324,928 members had made 2,989,489 posts on 379,044 topics. The worldwide community of makers has contributed an incredible amount of accessible knowledge helpful to novices and experts alike.

Transitioning Arduino from a project to a company was a big step. Other businesses who made boards were charging a lot of money for them. Arduino wanted to make theirs available at a low price to people across a wide range of industries. As with any business, pricing was key. They wanted prices that would get lots of customers but were also high enough to sustain the business.

For a business, getting to the end of the year and not being in the red is a success. Arduino may have an open-licensing strategy, but they are still a business, and all the things needed to successfully run one still apply. David says, “If you do those other things well, sharing things in an open-source way can only help you.”

While openly licensing the designs, documentation, and software ensures longevity, it does have risks. There’s a possibility that others will create knockoffs, clones, and copies. The CC BY-SA license means anyone can produce copies of their boards, redesign them, and even sell boards that copy the design. They don’t have to pay a license fee to Arduino or even ask permission. However, if they republish the design of the board, they have to give attribution to Arduino. If they change the design, they must release the new design using the same Creative Commons license to ensure that the new version is equally free and open.

Tom and David say that a lot of people have built companies off of Arduino, with dozens of Arduino derivatives out there. But in contrast to closed business models that can wring money out of the system over many years because there is no competition, Arduino founders saw competition as keeping them honest, and aimed for an environment of collaboration. A benefit of open over closed is the many new ideas and designs others have contributed back to the Arduino ecosystem, ideas and designs that Arduino and the Arduino community use and incorporate into new products.

Over time, the range of Arduino products has diversified, changing and adapting to new needs and challenges. In addition to simple entry level boards, new products have been added ranging from enhanced boards that provide advanced functionality and faster performance, to boards for creating Internet of Things applications, wearables, and 3-D printing. The full range of official Arduino products includes boards, modules (a smaller form-factor of classic boards), shields (elements that can be plugged onto a board to give it extra features), and kits.1

Arduino’s focus is on high-quality boards, well-designed support materials, and the building of community; this focus is one of the keys to their success. And being open lets you build a real community. David says Arduino’s community is a big strength and something that really does matter—in his words, “It’s good business.” When they started, the Arduino team had almost entirely no idea how to build a community. They started by conducting numerous workshops, working directly with people using the platform to make sure the hardware and software worked the way it was meant to work and solved people’s problems. The community grew organically from there.

A key decision for Arduino was trademarking the name. The founders needed a way to guarantee to people that they were buying a quality product from a company committed to open-source values and knowledge sharing. Trademarking the Arduino name and logo expresses that guarantee and helps customers easily identify their products, and the products sanctioned by them. If others want to sell boards using the Arduino name and logo, they have to pay a small fee to Arduino. This allows Arduino to scale up manufacturing and distribution while at the same time ensuring the Arduino brand isn’t hurt by low-quality copies.

Current official manufacturers are Smart Projects in Italy, SparkFun in the United States, and Dog Hunter in Taiwan/China. These are the only manufacturers that are allowed to use the Arduino logo on their boards. Trademarking their brand provided the founders with a way to protect Arduino, build it out further, and fund software and tutorial development. The trademark-licensing fee for the brand became Arduino’s revenue-generating model.

How far to open things up wasn’t always something the founders perfectly agreed on. David, who was always one to advocate for opening things up more, had some fears about protecting the Arduino name, thinking people would be mad if they policed their brand. There was some early backlash with a project called Freeduino, but overall, trademarking and branding has been a critical tool for Arduino.

David encourages people and businesses to start by sharing everything as a default strategy, and then think about whether there is anything that really needs to be protected and why. There are lots of good reasons to not open up certain elements. This strategy of sharing everything is certainly the complete opposite of how today’s world operates, where nothing is shared. Tom suggests a business formalize which elements are based on open sharing and which are closed. 

An Arduino blog post from 2013 entitled “Send In the Clones,” by one of the founders Massimo Banzi, does a great job of explaining the full complexities of how trademarking their brand has played out, distinguishing between official boards and those that are clones, derivatives, compatibles, and counterfeits.2

For David, an exciting aspect of Arduino is the way lots of people can use it to adapt technology in many different ways. Technology is always making more things possible but doesn’t always focus on making it easy to use and adapt. This is where Arduino steps in. Arduino’s goal is “making things that help other people make things.”

Arduino has been hugely successful in making technology and electronics reach a larger audience. For Tom, Arduino has been about “the democratization of technology.” Tom sees Arduino’s open-source strategy as helping the world get over the idea that technology has to be protected. Tom says, “Technology is a literacy everyone should learn.”

Ultimately, for Arduino, going open has been good business—good for product development, good for distribution, good for pricing, and good for manufacturing.

Arduino is a for-profit open-source electronics platform and computer hardware and software company.

Arduino

Building on and contributing to Google’s open source projects

Google Open Source projects 

Revenue model: charging a transaction fee


Interviewees: Nick Ierodiaconou and Joni Steiner, cofounders

Opendesk is an online platform that connects furniture designers around the world not just with customers but also with local registered makers who bring the designs to life. Opendesk and the designer receive a portion of every sale that is made by a maker.

Cofounders Nick Ierodiaconou and Joni Steiner studied and worked as architects together. They also made goods. Their first client was Mint Digital, who had an interest in open licensing. Nick and Joni were exploring digital fabrication, and Mint’s interest in open licensing got them to thinking how the open-source world may interact and apply to physical goods. They sought to design something for their client that was also reproducible. As they put it, they decided to “ship the recipe, but not the goods.” They created the design using software, put it under an open license, and had it manufactured locally near the client. This was the start of the idea for Opendesk. The idea for Wikihouse—another open project dedicated to accessible housing for all—started as discussions around the same table. The two projects ultimately went on separate paths, with Wikihouse becoming a nonprofit foundation and Opendesk a for-profit company.

When Nick and Joni set out to create Opendesk, there were a lot of questions about the viability of distributed manufacturing. No one was doing it in a way that was even close to realistic or competitive. The design community had the intent, but fulfilling this vision was still a long way away.

And now this sector is emerging, and Nick and Joni are highly interested in the commercialization aspects of it. As part of coming up with a business model, they began investigating intellectual property and licensing options. It was a thorny space, especially for designs. Just what aspect of a design is copyrightable? What is patentable? How can allowing for digital sharing and distribution be balanced against the designer’s desire to still hold ownership? In the end, they decided there was no need to reinvent the wheel and settled on using Creative Commons.

When designing the Opendesk system, they had two goals. They wanted anyone, anywhere in the world, to be able to download designs so that they could be made locally, and they wanted a viable model that benefited designers when their designs were sold. Coming up with a business model was going to be complex.

They gave a lot of thought to three angles—the potential for social sharing, allowing designers to choose their license, and the impact these choices would have on the business model.

In support of social sharing, Opendesk actively advocates for (but doesn’t demand) open licensing. And Nick and Joni are agnostic about which Creative Commons license is used; it’s up to the designer. They can be proprietary or choose from the full suite of Creative Commons licenses, deciding for themselves how open or closed they want to be.

For the most part, designers love the idea of sharing content. They understand that you get positive feedback when you’re attributed, what Nick and Joni called “reputational glow.” And Opendesk does an awesome job profiling the designers.

While designers are largely OK with personal sharing, there is a concern that someone will take the design and manufacture the furniture in bulk, with the designer not getting any benefits. So most Opendesk designers choose the Attribution-NonCommercial license (CC BY-NC).

Anyone can download a design and make it themselves, provided it’s for noncommercial use — and there have been many, many downloads. Or users can buy the product from Opendesk, or from a registered maker in Opendesk’s network, for on-demand personal fabrication. The network of Opendesk makers currently is made up of those who do digital fabrication using a computer-controlled CNC (Computer Numeric Control) machining device that cuts shapes out of wooden sheets according to the specifications in the design file.

Makers benefit from being part of Opendesk’s network. Making furniture for local customers is paid work, and Opendesk generates business for them. Joni said, “Finding a whole network and community of makers was pretty easy because we built a site where people could write in about their capabilities. Building the community by learning from the maker community is how we have moved forward.” Opendesk now has relationships with hundreds of makers in countries all around the world.

The makers are a critical part of the Opendesk business model. Their model builds off the makers’ quotes. Here’s how it’s expressed on Opendesk’s website:

When customers buy an Opendesk product directly from a registered maker, they pay:

the manufacturing cost as set by the maker (this covers material and labour costs for the product to be manufactured and any extra assembly costs charged by the maker)

a design fee for the designer (a design fee that is paid to the designer every time their design is used)

a percentage fee to the Opendesk platform (this supports the infrastructure and ongoing development of the platform that helps us build out our marketplace)

a percentage fee to the channel through which the sale is made (at the moment this is Opendesk, but in the future we aim to open this up to third-party sellers who can sell Opendesk products through their own channels—this covers sales and marketing fees for the relevant channel)

a local delivery service charge (the delivery is typically charged by the maker, but in some cases may be paid to a third-party delivery partner)

charges for any additional services the customer chooses, such as on-site assembly (additional services are discretionary—in many cases makers will be happy to quote for assembly on-site and designers may offer bespoke design options)

local sales taxes (variable by customer and maker location)


They then go into detail how makers’ quotes are created:

When a customer wants to buy an Opendesk . . . they are provided with a transparent breakdown of fees including the manufacturing cost, design fee, Opendesk platform fee and channel fees. If a customer opts to buy by getting in touch directly with a registered local maker using a downloaded Opendesk file, the maker is responsible for ensuring the design fee, Opendesk platform fee and channel fees are included in any quote at the time of sale. Percentage fees are always based on the underlying manufacturing cost and are typically apportioned as follows:

manufacturing cost: fabrication, finishing and any other costs as set by the maker (excluding any services like delivery or on-site assembly)

design fee: 8 percent of the manufacturing cost

platform fee: 12 percent of the manufacturing cost

channel fee: 18 percent of the manufacturing cost

sales tax: as applicable (depends on product and location)

Opendesk shares revenue with their community of designers. According to Nick and Joni, a typical designer fee is around 2.5 percent, so Opendesk’s 8 percent is more generous, and providing a higher value to the designer.

The Opendesk website features stories of designers and makers. Denis Fuzii published the design for the Valovi Chair from his studio in São Paulo. His designs have been downloaded over five thousand times in ninety-five countries. I.J. CNC Services is Ian Jinks, a professional maker based in the United Kingdom. Opendesk now makes up a large proportion of his business.

To manage resources and remain effective, Opendesk has so far focused on a very narrow niche—primarily office furniture of a certain simple aesthetic, which uses only one type of material and one manufacturing technique. This allows them to be more strategic and more disruptive in the market, by getting things to market quickly with competitive prices. It also reflects their vision of creating reproducible and functional pieces.

On their website, Opendesk describes what they do as “open making”: “Designers get a global distribution channel. Makers get profitable jobs and new customers. You get designer products without the designer price tag, a more social, eco-friendly alternative to mass-production and an affordable way to buy custom-made products.”

Nick and Joni say that customers like the fact that the furniture has a known provenance. People really like that their furniture was designed by a certain international designer but was made by a maker in their local community; it’s a great story to tell. It certainly sets apart Opendesk furniture from the usual mass-produced items from a store.

Nick and Joni are taking a community-based approach to define and evolve Opendesk and the “open making” business model. They’re engaging thought leaders and practitioners to define this new movement. They have a separate Open Making site, which includes a manifesto, a field guide, and an invitation to get involved in the Open Making community.4 People can submit ideas and discuss the principles and business practices they’d like to see used.

Nick and Joni talked a lot with us about intellectual property (IP) and commercialization. Many of their designers fear the idea that someone could take one of their design files and make and sell infinite number of pieces of furniture with it. As a consequence, most Opendesk designers choose the Attribution-NonCommercial license (CC BY-NC).

Opendesk established a set of principles for what their community considers commercial and noncommercial use. Their website states:

It is unambiguously commercial use when anyone:

charges a fee or makes a profit when making an Opendesk

sells (or bases a commercial service on) an Opendesk

It follows from this that noncommercial use is when you make an Opendesk yourself, with no intention to gain commercial advantage or monetary compensation. For example, these qualify as noncommercial:

you are an individual with your own CNC machine, or access to a shared CNC machine, and will personally cut and make a few pieces of furniture yourself

you are a student (or teacher) and you use the design files for educational purposes or training (and do not intend to sell the resulting pieces)

you work for a charity and get furniture cut by volunteers, or by employees at a fab lab or maker space

Whether or not people technically are doing things that implicate IP, Nick and Joni have found that people tend to comply with the wishes of creators out of a sense of fairness. They have found that behavioral economics can replace some of the thorny legal issues. In their business model, Nick and Joni are trying to suspend the focus on IP and build an open business model that works for all stakeholders—designers, channels, manufacturers, and customers. For them, the value Opendesk generates hangs off “open,” not IP.

The mission of Opendesk is about relocalizing manufacturing, which changes the way we think about how goods are made. Commercialization is integral to their mission, and they’ve begun to focus on success metrics that track how many makers and designers are engaged through Opendesk in revenue-making work.

As a global platform for local making, Opendesk’s business model has been built on honesty, transparency, and inclusivity. As Nick and Joni describe it, they put ideas out there that get traction and then have faith in people.

Opendesk is a for-profit company offering an online platform that connects furniture designers around the world with customers and local makers who bring the designs to life. 

OpenDesk

Sal Khan shares his plan to turn struggling students into scholars by helping them master concepts at their own pace.

Khan Academy

The Blender Institute is an animation studio that creates 3-D films using Blender software. Founded in 2006 in the Netherlands.

 crowdfunding (subscription-based), charging for physical copies, selling merchandise

Profile written by Sarah Hinchliff Pearson

For Ton Roosendaal, the creator of Blender software and its related entities, sharing is practical. Making their 3-D content creation software available under a free software license has been integral to its development and popularity. Using that software to make movies that were licensed with Creative Commons pushed that development even further. Sharing enables people to participate and to interact with and build upon the technology and content they create in a way that benefits Blender and its community in concrete ways.

Each open-movie project Blender runs produces a host of openly licensed outputs, not just the final film itself but all of the source material as well. The creative process also enhances the development of the Blender software because the technical team responds directly to the needs of the film production team, creating tools and features that make their lives easier. And, of course, each project involves a long, rewarding process for the creative and technical community working together.

Rather than just talking about the theoretical benefits of sharing and free culture, Ton is very much about doing and making free culture. Blender’s production coordinator Francesco Siddi told us, “Ton believes if you don’t make content using your tools, then you’re not doing anything.”

Blender’s history begins in the late 1990s, when Ton created the Blender software. Originally, the software was an in-house resource for his animation studio based in the Netherlands. Investors became interested in the software, so he began marketing the software to the public, offering a free version in addition to a paid version. Sales were disappointing, and his investors gave up on the endeavor in the early 2000s. He made a deal with investors—if he could raise enough money, he could then make the Blender software available under the GNU General Public License.

This was long before Kickstarter and other online crowdfunding sites existed, but Ton ran his own version of a crowdfunding campaign and quickly raised the money he needed. The Blender software became freely available for anyone to use. Simply applying the General Public License to the software, however, was not enough to create a thriving community around it. Francesco told us, “Software of this complexity relies on people and their vision of how people work together. Ton is a fantastic community builder and manager, and he put a lot of work into fostering a community of developers so that the project could live.”

Like any successful free and open-source software project, Blender developed quickly because the community could make fixes and improvements. “Software should be free and open to hack,” Francesco said. “Otherwise, everyone is doing the same thing in the dark for ten years.” Ton set up the Blender Foundation to oversee and steward the software development and maintenance.

After a few years, Ton began looking for new ways to push development of the software. He came up with the idea of creating CC-licensed films using the Blender software. Ton put a call online for all interested and skilled artists. Francesco said the idea was to get the best artists available, put them in a building together with the best developers, and have them work together. They would not only produce high-quality openly licensed content, they would improve the Blender software in the process.

They turned to crowdfunding to subsidize the costs of the project. They had about twenty people working full-time for six to ten months, so the costs were significant. Francesco said that when their crowdfunding campaign succeeded, people were astounded. “The idea that making money was possible by producing CC-licensed material was mind-blowing to people,” he said. “They were like, ‘I have to see it to believe it.’”

The first film, which was released in 2006, was an experiment. It was so successful that Ton decided to set up the Blender Institute, an entity dedicated to hosting open-movie projects. The Blender Institute’s next project was an even bigger success. The film, Big Buck Bunny, went viral, and its animated characters were picked up by marketers.

Francesco said that, over time, the Blender Institute projects have gotten bigger and more prominent. That means the filmmaking process has become more complex, combining technical experts and artists who focus on storytelling. Francesco says the process is almost on an industrial scale because of the number of moving parts. This requires a lot of specialized assistance, but the Blender Institute has no problem finding the talent it needs to help on projects. “Blender hardly does any recruiting for film projects because the talent emerges naturally,” Francesco said. “So many people want to work with us, and we can’t always hire them because of budget constraints.”

Blender has had a lot of success raising money from its community over the years. In many ways, the pitch has gotten easier to make. Not only is crowdfunding simply more familiar to the public, but people know and trust Blender to deliver, and Ton has developed a reputation as an effective community leader and visionary for their work. “There is a whole community who sees and understands the benefit of these projects,” Francesco said.

While these benefits of each open-movie project make a compelling pitch for crowdfunding campaigns, Francesco told us the Blender Institute has found some limitations in the standard crowdfunding model where you propose a specific project and ask for funding. “Once a project is over, everyone goes home,” he said. “It is great fun, but then it ends. That is a problem.”

To make their work more sustainable, they needed a way to receive ongoing support rather than on a project-by-project basis. Their solution is Blender Cloud, a subscription-style crowdfunding model akin to the online crowdfunding platform, Patreon. For about ten euros each month, subscribers get access to download everything the Blender Institute produces—software, art, training, and more. All of the assets are available under an Attribution license (CC BY) or placed in the public domain (CC0), but they are initially made available only to subscribers. Blender Cloud enables subscribers to follow Blender’s movie projects as they develop, sharing detailed information and content used in the creative process. Blender Cloud also has extensive training materials and libraries of characters and other assets used in various projects.

The continuous financial support provided by Blender Cloud subsidizes five to six full-time employees at the Blender Institute. Francesco says their goal is to grow their subscriber base. “This is our freedom,” he told us, “and for artists, freedom is everything.”

Blender Cloud is the primary revenue stream of the Blender Institute. The Blender Foundation is funded primarily by donations, and that money goes toward software development and maintenance. The revenue streams of the Institute and Foundation are deliberately kept separate. Blender also has other revenue streams, such as the Blender Store, where people can purchase DVDs, T-shirts, and other Blender products.

Ton has worked on projects relating to his Blender software for nearly twenty years. Throughout most of that time, he has been committed to making the software and the content produced with the software free and open. Selling a license has never been part of the business model.

Since 2006, he has been making films available along with all of their source material. He says he has hardly ever seen people stepping into Blender’s shoes and trying to make money off of their content. Ton believes this is because the true value of what they do is in the creative and production process. “Even when you share everything, all your original sources, it still takes a lot of talent, skills, time, and budget to reproduce what you did,” Ton said.

For Ton and Blender, it all comes back to doing.

Blender Institute

The Noun Project creates and shares visual language. There are millions who use Noun Project symbols to simplify communication across borders, languages, and cultures.

The original idea for the Noun Project came to cofounder Edward Boatman while he was a student in architecture design school. He’d always done a lot of sketches and started to draw what used to fascinate him as a child, like trains, sequoias, and bulldozers. He began thinking how great it would be if he had a simple image or small icon of every single object or concept on the planet.

When Edward went on to work at an architecture firm, he had to make a lot of presentation boards for clients. But finding high-quality sources for symbols and icons was difficult. He couldn’t find any website that could provide them. Perhaps his idea for creating a library of icons could actually help people in similar situations.

With his partner, Sofya Polyakov, he began collecting symbols for a website and writing a business plan. Inspiration came from the book Professor and the Madman, which chronicles the use of crowdsourcing to create the Oxford English Dictionary in 1870. Edward began to imagine crowdsourcing icons and symbols from volunteer designers around the world.

Then Edward got laid off during the recession, which turned out to be a huge catalyst. He decided to give his idea a go, and in 2010 Edward and Sofya launched the Noun Project with a Kickstarter campaign, back when Kickstarter was in its infancy.1 They thought it’d be a good way to introduce the global web community to their idea. Their goal was to raise $1,500, but in twenty days they got over $14,000. They realized their idea had the potential to be something much bigger.

They created a platform where symbols and icons could be uploaded, and Edward began recruiting talented designers to contribute their designs, a process he describes as a relatively easy sell. Lots of designers have old drawings just gathering “digital dust” on their hard drives. It’s easy to convince them to finally share them with the world.

The Noun Project currently has about seven thousand designers from around the world. But not all submissions are accepted. The Noun Project’s quality-review process means that only the best works become part of its collection. They make sure to provide encouraging, constructive feedback whenever they reject a piece of work, which maintains and builds the relationship they have with their global community of designers.

Creative Commons is an integral part of the Noun Project’s business model; this decision was inspired by Chris Anderson’s book Free: The Future of Radical Price, which introduced Edward to the idea that you could build a business model around free content.

Edward knew he wanted to offer a free visual language while still providing some protection and reward for its contributors. There is a tension between those two goals, but for Edward, Creative Commons licenses bring this idealism and business opportunity together elegantly. He chose the Attribution (CC BY) license, which means people can download the icons for free and modify them and even use them commercially. The requirement to give attribution to the original creator ensures that the creator can build a reputation and get global recognition for their work. And if they simply want to offer an icon that people can use without having to give credit, they can use CC0 to put the work into the public domain.

Noun Project’s business model and means of generating revenue have evolved significantly over time. Their initial plan was to sell T-shirts with the icons on it, which in retrospect Edward says was a horrible idea. They did get a lot of email from people saying they loved the icons but asking if they could pay a fee instead of giving attribution. Ad agencies (among others) wanted to keep marketing and presentation materials clean and free of attribution statements. For Edward, “That’s when our lightbulb went off.”

They asked their global network of designers whether they’d be open to receiving modest remuneration instead of attribution. Designers saw it as a win-win. The idea that you could offer your designs for free and have a global audience and maybe even make some money was pretty exciting for most designers.

The Noun Project first adopted a model whereby using an icon without giving attribution would cost $1.99 per icon. The model’s second iteration added a subscription component, where there would be a monthly fee to access a certain number of icons—ten, fifty, a hundred, or five hundred. However, users didn’t like these hard-count options. They preferred to try out many similar icons to see which worked best before eventually choosing the one they wanted to use. So the Noun Project moved to an unlimited model, whereby users have unlimited access to the whole library for a flat monthly fee. This service is called NounPro and costs $9.99 per month. Edward says this model is working well—good for customers, good for creators, and good for the platform.

Customers then began asking for an application-programming interface (API), which would allow Noun Project icons and symbols to be directly accessed from within other applications. Edward knew that the icons and symbols would be valuable in a lot of different contexts and that they couldn’t possibly know all of them in advance, so they built an API with a lot of flexibility. Knowing that most API applications would want to use the icons without giving attribution, the API was built with the aim of charging for its use. You can use what’s called the “Playground API” for free to test how it integrates with your application, but full implementation will require you to purchase the API Pro version.

The Noun Project shares revenue with its international designers. For one-off purchases, the revenue is split 70 percent to the designer and 30 percent to Noun Project.

The revenue from premium purchases (the subscription and API options) is split a little differently. At the end of each month, the total revenue from subscriptions is divided by Noun Project’s total number of downloads, resulting in a rate per download—for example, it could be $0.13 per download for that month. For each download, the revenue is split 40 percent to the designer and 60 percent to the Noun Project. (For API usage, it’s per use instead of per download.) Noun Project’s share is higher this time as it’s providing more service to the user.

The Noun Project tries to be completely transparent about their royalty structure.2 They tend to over communicate with creators about it because building trust is the top

For most creators, contributing to the Noun Project is not a full-time job but something they do on the side. Edward categorizes monthly earnings for creators into three broad categories: enough money to buy beer; enough to pay the bills; and most successful of all, enough to pay the rent.

Recently the Noun Project launched a new app called Lingo. Designers can use Lingo to organize not just their Noun Project icons and symbols but also their photos, illustrations, UX designs, et cetera. You simply drag any visual item directly into Lingo to save it. Lingo also works for teams so people can share visuals with each other and search across their combined collections. Lingo is free for personal use. A pro version for $9.99 per month lets you add guests. A team version for $49.95 per month allows up to twenty-five team members to collaborate, and to view, use, edit, and add new assets to each other’s collections. And if you subscribe to NounPro, you can access Noun Project from within Lingo.

The Noun Project gives a ton of value away for free. A very large percentage of their roughly one million members have a free account, but there are still lots of paid accounts coming from digital designers, advertising and design agencies, educators, and others who need to communicate ideas visually.

For Edward, “creating, sharing, and celebrating the world’s visual language” is the most important aspect of what they do; it’s their stated mission. It differentiates them from others who offer graphics, icons, or clip art.

Noun Project creators agree. When surveyed on why they participate in the Noun Project, this is how designers rank their reasons: 1) to support the Noun Project mission, 2) to promote their own personal brand, and 3) to generate money. It’s striking to see that money comes third, and mission, first. If you want to engage a global network of contributors, it’s important to have a mission beyond making money.

In Edward’s view, Creative Commons is central to their mission of sharing and social good. Using Creative Commons makes the Noun Project’s mission genuine and has generated a lot of their initial traction and credibility. CC comes with a built-in community of users and fans.

Edward told us, “Don’t underestimate the power of a passionate community around your product or your business. They are going to go to bat for you when you’re getting ripped in the media. If you go down the road of choosing to work with Creative Commons, you’re taking the first step to building a great community and tapping into a really awesome community that comes with it. But you need to continue to foster that community through other initiatives and continue to nurture it.”

The Noun Project nurtures their creators’ second motivation—promoting a personal brand—by connecting every icon and symbol to the creator’s name and profile page; each profile features their full collection. Users can also search the icons by the creator’s name.

The Noun Project also builds community through Iconathons—hackathons for icons.2 In partnership with a sponsoring organization, the Noun Project comes up with a theme (e.g., sustainable energy, food bank, guerrilla gardening, human rights) and a list of icons that are needed, which designers are invited to create at the event. The results are vectorized, and added to the Noun Project using CC0 so they can be used by anyone for free.

Providing a free version of their product that satisfies a lot of their customers’ needs has actually enabled the Noun Project to build the paid version, using a service-oriented model. The Noun Project’s success lies in creating services and content that are a strategic mix of free and paid while staying true to their mission—creating, sharing, and celebrating the world’s visual language. Integrating Creative Commons into their model has been key to that goal.

The Noun Project creates and shares visual language to simplify communication across borders, languages, and cultures.

The Noun Project

The open-source world has learned to deal with a flood of new, oftentimes divergent, ideas using hosting services like GitHub -- so why can't governments? 

Clay Shirky: How the Internet will (one day) transform government

Cable Green talks about the importance of Open Procurement 

Open policies and Open Procurement 

The Documentary brings you the full story behind the early days of React, focusing on the dedicated group of developers who helped bring it to the world stage.

React.js: The Documentary

More than 100.000 characters covering 800 languages, all released as open source.

Noto open source fonts

Linus Torvalds transformed technology twice — first with the Linux kernel, which helps power the Internet, and again with Git, the source code management system used by developers worldwide.

The mind behind Linux | Linus Torvalds

The Open Data Institute is an independent nonprofit that connects, equips, and inspires people around the world to innovate with data. Founded in 2012 in the UK.

Revenue model: grant and government funding, charging for custom services, donations

Interviewee: Jeni Tennison, technical director

Cofounded by Sir Tim Berners-Lee and Sir Nigel Shadbolt in 2012, the London-based Open Data Institute (ODI) offers data-related training, events, consulting services, and research. For ODI, Creative Commons licenses are central to making their own business model and their customers’ open. CC BY (Attribution), CC BY-SA (Attribution-ShareAlike), and CC0 (placed in the public domain) all play a critical role in ODI’s mission to help people around the world innovate with data.

Data underpins planning and decision making across all aspects of society. Weather data helps farmers know when to plant their crops, flight time data from airplane companies helps us plan our travel, data on local housing informs city planning. When this data is not only accurate and timely, but open and accessible, it opens up new possibilities. Open data can be a resource businesses use to build new products and services. It can help governments measure progress, improve efficiency, and target investments. It can help citizens improve their lives by better understanding what is happening around them.

The Open Data Institute’s 2012–17 business plan starts out by describing its vision to establish itself as a world-leading center and to research and be innovative with the opportunities created by the UK government’s open data policy. (The government was an early pioneer in open policy and open-data initiatives.) It goes on to say that the ODI wants to—

demonstrate the commercial value of open government data and how open-data policies affect this;

develop the economic benefits case and business models for open data;

show how open data can improve public services.1

ODI is very explicit about how it wants to make open business models, and defining what this means. Jeni Tennison, ODI’s technical director, puts it this way: “There is a whole ecosystem of open—open-source software, open government, open-access research—and a whole ecosystem of data. ODI’s work cuts across both, with an emphasis on where they overlap—with open data.” ODI’s particular focus is to show open data’s potential for revenue.

As an independent nonprofit, ODI secured £10 million over five years from the UK government via Innovate UK, an agency that promotes innovation in science and technology. For this funding, ODI has to secure matching funds from other sources, some of which were met through a $4.75-million investment from the Omidyar Network.

Jeni started out as a developer and technical architect for data.gov.uk, the UK government’s pioneering open-data initiative. She helped make data sets from government departments available as open data. She joined ODI in 2012 when it was just starting up, as one of six people. It now has a staff of about sixty.

ODI strives to have half its annual budget come from the core UK government and Omidyar grants, and the other half from project-based research and commercial work. In Jeni’s view, having this balance of revenue sources establishes some stability, but also keeps them motivated to go out and generate these matching funds in response to market needs.

On the commercial side, ODI generates funding through memberships, training, and advisory services.

You can join the ODI as an individual or commercial member. Individual membership is pay-what-you-can, with options ranging from £1 to £100. Members receive a newsletter and related communications and a discount on ODI training courses and the annual summit, and they can display an ODI-supporter badge on their website. Commercial membership is divided into two tiers: small to medium size enterprises and nonprofits at £720 a year, and corporations and government organizations at £2,200 a year. Commercial members have greater opportunities to connect and collaborate, explore the benefits of open data, and unlock new business opportunities. (All members are listed on their website.)2

ODI provides standardized open data training courses in which anyone can enroll. The initial idea was to offer an intensive and academically oriented diploma in open data, but it quickly became clear there was no market for that. Instead, they offered a five-day-long public training course, which has subsequently been reduced to three days; now the most popular course is one day long. The fee, in addition to the time commitment, can be a barrier for participation. Jeni says, “Most of the people who would be able to pay don’t know they need it. Most who know they need it can’t pay.” Public-sector organizations sometimes give vouchers to their employees so they can attend as a form of professional development.

ODI customizes training for clients as well, for which there is more demand. Custom training usually emerges through an established relationship with an organization. The training program is based on a definition of open-data knowledge as applicable to the organization and on the skills needed by their high-level executives, management, and technical staff. The training tends to generate high interest and commitment.

Education about open data is also a part of ODI’s annual summit event, where curated presentations and speakers showcase the work of ODI and its members across the entire ecosystem. Tickets to the summit are available to the public, and hundreds of people and organizations attend and participate. In 2014, there were four thematic tracks and over 750 attendees.

In addition to memberships and training, ODI provides advisory services to help with technical-data support, technology development, change management, policies, and other areas. ODI has advised large commercial organizations, small businesses, and international governments; the focus at the moment is on government, but ODI is working to shift more toward commercial organizations.

On the commercial side, the following value propositions seem to resonate:

Data-driven insights. Businesses need data from outside their business to get more insight. Businesses can generate value and more effectively pursue their own goals if they open up their own data too. Big data is a hot topic.

Open innovation. Many large-scale enterprises are aware they don’t innovate very well. One way they can innovate is to open up their data. ODI encourages them to do so even if it exposes problems and challenges. The key is to invite other people to help while still maintaining organizational autonomy.

Corporate social responsibility. While this resonates with businesses, ODI cautions against having it be the sole reason for making data open. If a business is just thinking about open data as a way to be transparent and accountable, they can miss out on efficiencies and opportunities.

During their early years, ODI wanted to focus solely on the United Kingdom. But in their first year, large delegations of government visitors from over fifty countries wanted to learn more about the UK government’s open-data practices and how ODI saw that translating into economic value. They were contracted as a service provider to international governments, which prompted a need to set up international ODI “nodes.”

Nodes are franchises of the ODI at a regional or city level. Hosted by existing (for-profit or not-for-profit) organizations, they operate locally but are part of the global network. Each ODI node adopts the charter, a set of guiding principles and rules under which ODI operates. They develop and deliver training, connect people and businesses through membership and events, and communicate open-data stories from their part of the world. There are twenty-seven different nodes across nineteen countries. ODI nodes are charged a small fee to be part of the network and to use the brand.

ODI also runs programs to help start-ups in the UK and across Europe develop a sustainable business around open data, offering mentoring, advice, training, and even office space.3

A big part of ODI’s business model revolves around community building. Memberships, training, summits, consulting services, nodes, and start-up programs create an ever-growing network of open-data users and leaders. (In fact, ODI even operates something called an Open Data Leaders Network.) For ODI, community is key to success. They devote significant time and effort to build it, not just online but through face-to-face events.

ODI has created an online tool that organizations can use to assess the legal, practical, technical, and social aspects of their open data. If it is of high quality, the organization can earn ODI’s Open Data Certificate, a globally recognized mark that signals that their open data is useful, reliable, accessible, discoverable, and supported.4

Separate from commercial activities, the ODI generates funding through research grants. Research includes looking at evidence on the impact of open data, development of open-data tools and standards, and how to deploy open data at scale.

Creative Commons 4.0 licenses cover database rights and ODI recommends CC BY, CC BY-SA, and CC0 for data releases. ODI encourages publishers of data to use Creative Commons licenses rather than creating new “open licenses” of their own.

For ODI, open is at the heart of what they do. They also release any software code they produce under open-source-software licenses, and publications and reports under CC BY or CC BY-SA licenses. ODI’s mission is to connect and equip people around the world so they can innovate with data. Disseminating stories, research, guidance, and code under an open license is essential for achieving that mission. It also demonstrates that it is perfectly possible to generate sustainable revenue streams that do not rely on restrictive licensing of content, data, or code. People pay to have ODI experts provide training to them, not for the content of the training; people pay for the advice ODI gives them, not for the methodologies they use. Producing open content, data, and source code helps establish credibility and creates leads for the paid services that they offer. According to Jeni, “The biggest lesson we have learned is that it is completely possible to be open, get customers, and make money.”

To serve as evidence of a successful open business model and return on investment, ODI has a public dashboard of key performance indicators. Here are a few metrics as of April 27, 2016:

Total amount of cash investments unlocked in direct investments in ODI, competition funding, direct contracts, and partnerships, and income that ODI nodes and ODI start-ups have generated since joining the ODI program: £44.5 million

Total number of active members and nodes across the globe: 1,350

Total sales since ODI began: £7.44 million

Total number of unique people reached since ODI began, in person and online: 2.2 million

Total Open Data Certificates created: 151,000

The Open Data Institute

Kubernetes

Lumen Learning is a for-profit company helping educational institutions use open educational resources (OER). Founded in 2013 in the U.S.

Revenue model: charging for custom services, grant funding

Interviewees: David Wiley and Kim Thanos, cofounders

Cofounded by open education visionary Dr. David Wiley and education-technology strategist Kim Thanos, Lumen Learning is dedicated to improving student success, bringing new ideas to pedagogy, and making education more affordable by facilitating adoption of open educational resources. In 2012, David and Kim partnered on a grant-funded project called the Kaleidoscope Open Course Initiative.1 It involved a set of fully open general-education courses across eight colleges predominantly serving at-risk students, with goals to dramatically reduce textbook costs and collaborate to improve the courses to help students succeed. David and Kim exceeded those goals: the cost of the required textbooks, replaced with OER, decreased to zero dollars, and average student-success rates improved by 5 to 10 percent when compared with previous years. After a second round of funding, a total of more than twenty-five institutions participated in and benefited from this project. It was career changing for David and Kim to see the impact this initiative had on low-income students. David and Kim sought further funding from the Bill and Melinda Gates Foundation, who asked them to define a plan to scale their work in a financially sustainable way. That is when they decided to create Lumen Learning.

David and Kim went back and forth on whether it should be a nonprofit or for-

profit. A nonprofit would make it a more comfortable fit with the education sector but meant they’d be constantly fund-raising and seeking grants from philanthropies. Also, grants usually require money to be used in certain ways for specific deliverables. If you learn things along the way that change how you think the grant money should be used, there often isn’t a lot of flexibility to do so.

But as a for-profit, they’d have to convince educational institutions to pay for what Lumen had to offer. On the positive side, they’d have more control over what to do with the revenue and investment money; they could make decisions to invest the funds or use them differently based on the situation and shifting opportunities. In the end, they chose the for-profit status, with its different model for and approach to sustainability.

Right from the start, David and Kim positioned Lumen Learning as a way to help institutions engage in open educational resources, or OER. OER are teaching, learning, and research materials, in all different media, that reside in the public domain or are released under an open license that permits free use and repurposing by others.

Originally, Lumen did custom contracts for each institution. This was complicated and challenging to manage. However, through that process patterns emerged which allowed them to generalize a set of approaches and offerings. Today they don’t customize as much as they used to, and instead they tend to work with customers who can use their off-the-shelf options. Lumen finds that institutions and faculty are generally very good at seeing the value Lumen brings and are willing to pay for it. Serving disadvantaged learner populations has led Lumen to be very pragmatic; they describe what they offer in quantitative terms—with facts and figures—and in a way that is very student-focused. Lumen Learning helps colleges and universities—

replace expensive textbooks in high-enrollment courses with OER;

provide enrolled students day one access to Lumen’s fully customizable OER course materials through the institution’s learning-management system;

measure improvements in student success with metrics like passing rates, persistence, and course completion; and

collaborate with faculty to make ongoing improvements to OER based on student success research.

Lumen has developed a suite of open, Creative Commons–licensed courseware in more than sixty-five subjects. All courses are freely and publicly available right off their website. They can be copied and used by others as long as they provide attribution to Lumen Learning following the terms of the Creative Commons license.

Then there are three types of bundled services that cost money. One option, which Lumen calls Candela courseware, offers integration with the institution’s learning-management system, technical and pedagogical support, and tracking of effectiveness. Candela courseware costs institutions ten dollars per enrolled student.

A second option is Waymaker, which offers the services of Candela but adds personalized learning technologies, such as study plans, automated messages, and assessments, and helps instructors find and support the students who need it most. Waymaker courses cost twenty-five dollars per enrolled student.

The third and emerging line of business for Lumen is providing guidance and support for institutions and state systems that are pursuing the development of complete OER degrees. Often called Z-Degrees, these programs eliminate textbook costs for students in all courses that make up the degree (both required and elective) by replacing commercial textbooks and other expensive resources with OER.

Lumen generates revenue by charging for their value-added tools and services on top of their free courses, just as solar-power companies provide the tools and services that help people use a free resource—sunlight. And Lumen’s business model focuses on getting the institutions to pay, not the students. With projects they did prior to Lumen, David and Kim learned that students who have access to all course materials from day one have greater success. If students had to pay, Lumen would have to restrict access to those who paid. Right from the start, their stance was that they would not put their content behind a paywall. Lumen invests zero dollars in technologies and processes for restricting access—no digital rights management, no time bombs. While this has been a challenge from a business-model perspective, from an open-access perspective, it has generated immense goodwill in the community.

In most cases, development of their courses is funded by the institution Lumen has a contract with. When creating new courses, Lumen typically works with the faculty who are teaching the new course. They’re often part of the institution paying Lumen, but sometimes Lumen has to expand the team and contract faculty from other institutions. First, the faculty identifies all of the course’s learning outcomes. Lumen then searches for, aggregates, and curates the best OER they can find that addresses those learning needs, which the faculty reviews.

Sometimes faculty like the existing OER but not the way it is presented. The open licensing of existing OER allows Lumen to pick and choose from images, videos, and other media to adapt and customize the course. Lumen creates new content as they discover gaps in existing OER. Test-bank items and feedback for students on their progress are areas where new content is frequently needed. Once a course is created, Lumen puts it on their platform with all the attributions and links to the original sources intact, and any of Lumen’s new content is given an Attribution (CC BY) license.

Using only OER made them experience firsthand how complex it could be to mix differently licensed work together. A common strategy with OER is to place the Creative Commons license and attribution information in the website’s footer, which stays the same for all pages. This doesn’t quite work, however, when mixing different OER together.

Remixing OER often results in multiple attributions on every page of every course—text from one place, images from another, and videos from yet another. Some are licensed as Attribution (CC BY), others as Attribution-ShareAlike (CC BY-SA). If this information is put within the text of the course, faculty members sometimes try to edit it and students find it a distraction. Lumen dealt with this challenge by capturing the license and attribution information as metadata, and getting it to show up at the end of each page.

Lumen Learning is a for-profit company helping educational institutions use open educational resources (OER).

Open stories, projects and people

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