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. 

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