How do you Profit?

Explanation of how the business remains profitable while sharing designs freely.

Welcome! This post answers one big FAQ. Actually it is the most F’d among the AQ’s! When we tell folks our designs are free, this question invevitably follows.
To describe our unique business model, we offer some analogies. Choose any analogy that feels familiar to you:

How do you Profit?

We are like Dominoes Pizza,

(How do you make money if you share the designs?) the world’s largest pizza chain. They deliver a physical useful product to their customer in exchange for money. Their product is pizza while our product is robots. Without customization, Dominoes would fail immediately. The product has been customized, assembled, baked, and delivered. They have an online menu for users to get it exactly how they want it. If Dominoes gave their pizza recipe out for free, we suspect it would not impact their market share. The value of Dominoes is not the recipe, and it never was. The assets of Dominoes company is their robust supply chain, well-planned distribution hubs, online ordering technology, digital systems driving quality control and fulfillment, and continuous customer feedback that helps them serve. In a hypothetical scenario of open-sourced recipes, dominoes WOULD be used by early-stage learners but NOT likely to receive contributions from expert pizza-makers. SCUTTLE designs are used by both.

We are like Dell Computers,

(how do you make money if you don’t own the technology in each component?) cited by wikipedia as a company that “develops, sells, repairs, and supports computers and related products and services.” Consider SCUTTLE Robotics by the the same business but replace “computers” with “robots.” Just like computers, Robots are not one-size-fits-all, therefore customization + quality control is a critical value-add which other companies have not yet developed. Dell does not design its own elements like processors, hard drives, batteries, monitors, wifi-cards, etc. In the same way, SCUTTLE does not design our own technology ingredients, because it is favorable to outsource to the best developers in the world. Our value-add, in this business model, is the knowledge and system of delivering customized yet robust machines.

The Dell analogy also answers business-minds’ second favorite question: BUT WHO IS YOUR AUDIENCE? Just like Dell, our customers are: students, colleges, business, geeks, and research teams who need a good computer(robot) to do what they do. It is impossible to describe the market in a few words.

We are like Prusa Research,

(How can you scale using silly little 3D Printing technology instead of industrial manufacturing?) the 2015 top-selling 3D printer offering. A company that established and grew in synchrony with the actual market itself. We are like Prusa but for robotics. (Let’s roughly say mobile robots global adoption is 15 years later in timeline). In printer timelines, Prusa was the only highly-refined printer design which could be afforded in the $500 range for many years. Additionally the design is open-source, also had community contributors, used off-the-shelf design BOM, was not afraid to innovate and experiment, scaled greatly without an industrial manufacturing facility at it’s fingertips, and lacked any massive cash investment. They focused on one standard design form factor while simultaneously offering a plethora of mods. The tightly-focused central design streamlined the software integration taking place around the world, took advantages of rapid advancements in refined drivers of key components (like stepper motors), invited global innovators who also worked with the same familiar components, and… we could go on forever in similarities. The hub-and-spoke design offering gives, at the hub, drastic advantages over fully-customized designs. At the hub, we have intense engineering power. We are sure that a specific form factor is the “mid-range” in size and features, with the most utility for the money. And we are sure such a hub can allow for up-scale to bigger units and downscale to smaller units with the least amount of redesign. At the periphery of the 3D printing market, there are wild innovations such as metal printing, various motion layouts (instead of x-y gantry), printers with heated enclosures, and many valuable assets that are undeniable in market demand but also unnecessary cost additions for the largest market groups.

A special feature of Prusa: if you used Prusa’s publications and learned about 3D printers, you would also learn how all 3D printers work. The same is true of SCUTTLE and mobile robots.

Prusa clearly demonstrates an answer to another FAQ: How can you scale a product using 3D printed parts? (See video linked above)

We are like Linux,

(How do you market your technology if the use-case is so generalized?) but with hardare instead of software. One could say that Linux does not profit from their designs, rather from the stage of placing the design into an application. The design is free and open, but their software branches add to the root functions and thereby meet needs for specific markets, and create whole clusters of profit opportunities. Again it is like a hub-and-spoke design offering. The hub generates quality and the spokes generate profits. Admittedly I do not know the financial model for Linux but in the functional sense, Linux serves businesses that serve businesses that serve customers, and at the perimeter of the exchange there is more than enough financial transaction to flow resources back to the hub.

Linus Torvalds did not invent software; he mastered a task of flexible integration. The value of the design effort is the underlying structure of a software which can accomodate expansion of functions efficiently while maintaining security, execution-time, and documentation that is understandable by the engineering experts who adjust and redistribute it.

We didn’t invent mobile robots; we integrate components in such a way that it is understandable by experts in mechanical, electrical, electronic, communication, and security engineers. We document more heavily than any open robotics project, and document at a level that speaks the language of all fields of engineers who will be critical in meeting the needs of end users.

In some cases, we are forced to invent new ways to document – just like Linux, our documentation task is intensive because our systems are novel, useful, and nonobvious. Without documentation, the utility diminishes. And like magic, if we devleop new methods for documentation, we ease the tasks of every spoke-localized developer and help them help us help everyone.

Linux also answers an additional FAQ: why do you have a nonprofit and a for-profit organization?

We are like HEBI Robotics,

(How do you make money if your user base is so tiny (eg, developers of robots)? A business that makes robotic modules that are so flexible it is impossible to deny the utility of the product, while simultaneously impossible to pin down one singular use-case. But unlike HEBI, we provide educational content for the lower levels; we are onboarding the next generation of soon-to-be robotics engineers so that the design elements feel familiar as soon as the students are graduating from high-school. Also unlike HEBI, we do not offer demonstrations at the bleeding edge of motion-control. Instead, our customers (in B2B space) create demonstrations at the bleeding edge of a several niche technologies that are suitable for mobile robots but also suitable for other markets.

A robotic arm by HEBI with elastic behavior may be suitable for robotic heart surgery and used in a publication by a biomedical engineer, while the same arm is useful in thousands of other applications. So, the developer of a human tissue sensor probe may find himself a customer of HEBI so that he does not need to build an arm from scratch. In the same way, we have TI engineers devleoping radar sensors which are demonstrated on a SCUTTLE but suitable for self-driving Teslas.

We are like Raspberry Pi,

(how do you make money if competition is so massive and so fierce?) A business that compiles a massive documentation-set, and only sells one product, and sells a device that is very affordable yet intensely capable. Pi receives aid from engineers globally in developing tutorials, and makes hardware that is multidisciplinary. Pi technology can be found in elementary classrooms, as well as in space exploration machines. It does not have the most powerful computing, it does not have the lowest cost, nor the best of any singular technology comprising it, but it sits on an unbelievable stack of STANDARDS that are so ubiquitous that one cannot find a higher-selling computing machine. One could claim that the value of Pi is that the developers simply understood and synced-up to standards in each discipline of technologies of such a multidisciplinary device. SCUTTLE and raspberry pi both are multidisciplinary gadgets, but our machine has motion.

If you identified the most high-volume use-case for raspberry pi, (let’s say college education), and truncated sales to that market, you could still find so many niche use-cases at the periphery, the company could still profit just by selling to only particular B2B markets where the Pi meets a need so uniquely it would validate a 10x pricing. This brings us to another business in a similar market.

We are like Beaglebone,

(How do you make money if we can see obvious competitors that are obviously bigger?) A company with a product which in some sense competes with Pi, but chose a more specific market to serve. Beagle has specialization that gives irrefutable performance enhancements. Compared with Pi, Beagle specifically chose their customer-base and then developed an open-source product to meet the needs. For many engineering applications in 2016, Beaglebone Blue offered 8x value with 2x pricing. That is, the performance for a particular use-case was 8-fold for the Beaglebone Blue compared with the Raspberry Pi 3. Beaglebone dedicated themselves to college level education, so the company sacrificed broad-ness to achieve a particular offering: and succeeded at it. If you mistook the Beagle for just a pi-competitor, you’d miss the fact that it was better for robotics while Pi was still the best choice for making a monitor into a smart TV.

SCUTTLE is like Beagle in that we’re often mistaken for a competitor that isn’t competing with us.

If you mistake SCUTTLE for a Turtlebot competitor, you’ll miss the fact that we offer open hardware.

If you mistake SCUTTLE for a VEX robot competitor, you’ll miss the fact that we carry a payload.

If you mistake SCUTTLE for an Amazon Astro competitor, you’ll miss the fact that we offer modularity.

If you mistake SCUTTLE for a lego-kit competitor, you’ll miss the fact that we teach University-level education.

If you mistake SCUTTLE for any educational robot, you’ll miss that we are more multidisciplinary.

If you mistake SCUTTLE for any “open hardware” design, you’ll miss the definition of true open-source.

If you mistake SCUTTLE for a robot with higher sales volume, you’ll miss the fact that quality takes time and this market is in it’s first decade. There are no shortcuts.

If you mistake SCUTTLE for any robot with a higher performance metric, you’ll miss the difference between a Corolla and a Ferrari.

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