Safe and legal

Getting into the business of designing and constructing (even selling) industrial machines is going to create ethical and legal issues. It makes sense to skirt regulatory requirements where possible, like by designing a 3-wheel car instead of a 4-wheel car, but it never makes sense to skirt ethical requirements.

What is the best way to balance the need for machines that are safe to use with the need to reduce costs and the impossibility of suing volunteers?

"While the community crafted the exterior, Local Motors designed or selected the chassis, engine, and transmission thanks to relationships with companies like Penske Automotive Group, which helped the firm source everything from dashboard dials to the new BMW clean diesel engine the Rally Fighter will use. This combination — have the pros handle the elements that are critical to performance, safety, and manufacturability while the community designs the parts that give the car its shape and style — allows crowdsourcing to work even for a product whose use has life-and-death implications." Wired

"Rogers estimates that less than 30 percent of car design students get jobs at auto companies upon graduation. The rest become frustrated car designers, exactly the pool of talent that might respond to a well-organized vehicle design competition and community. Today, the Local Motors Web site has around 5,000 members. That’s a 500-to-1 ratio of volunteer contributors to employees." Wired

"In the mid-1930s, Ronald Coase, then a recent London School of Economics graduate, was musing over what to many people might have seemed a silly question: Why do companies exist? Why do we pledge our allegiance to an institution and gather in the same building to get things done? His answer: to minimize “transaction costs.” When people share a purpose and have established roles, responsibilities, and modes of communication, it’s easy to make things happen. You simply turn to the person in the next cubicle and ask them to do their job. But several years ago, Bill Joy, one of the cofounders of Sun Microsystems, revealed the flaw in Coase’s model. “No matter who you are, most of the smartest people work for someone else,” he rightly observed. Of course, that had always been true, but before, it hardly mattered if you were in Detroit and someone better was in Dakar; you were here and they were there, and that was the end of it. But Joy’s point was that this was changing. With the Internet, you didn’t have to settle for the next cubicle. You could tap the best person out there, even if they were in Dakar. Joy’s law turned Coase’s law upside down. Now, working within a company often imposes higher transaction costs than running a project online. Why turn to the person who happens to be in the next cubicle when it’s just as easy to turn to an online community member from a global marketplace of talent? Companies are full of bureaucracy, procedures, and approval processes, a structure designed to defend the integrity of the organization. Communities form around shared interests and needs and have no more process than they require. The community exists for the project, not to support the company in which the project resides. Thus the new industrial organizational model. It’s built around small pieces, loosely joined. Companies are small, virtual, and informal. Most participants are not employees. They form and re-form on the fly, driven by ability and need rather than affiliation and obligation. It doesn’t matter who the best people work for; if the project is interesting enough, the best people will find it." Wired

" [DIY Drones will] do about $250,000 in revenue, with demand rising fast and a lot of products in the pipeline. With luck, we’ll be a million-dollar business by the third year, which would put us solidly in the ranks of millions of similarly successful US companies. We are just a tiny gear in the economic engine driving the US — on the face of it, this doesn’t seem like a world- changing economic model. But the difference between this kind of small business and the dry cleaners and corner shops that make up the majority of micro-enterprise in the country is that we’re global and high tech. Two-thirds of our sales come from outside the US, and our products compete at the low end with defense contractors like Lockheed Martin and Boeing. Although we don’t employ many people or make much money, our basic model is to lower the cost of technology by a factor of 10 (mostly by not charging for intellectual property). The effect is felt primarily by consumers; when you take an order of magnitude out of pricing in any market, you can radically reshape it, bringing in more and different customers. Lowering costs is a way to democratize technology, too." Wired