I was reading an interesting article in EE Times by MIT Professor Neil Gershenfeld. He talks about his new book "Fab - The Coming Revolution on Your Desktop — from Personal Computers to Personal Fabrication" and giving classes to students who wanted to learn to use the digitally controlled tools in his lab. He found that he was spending a lot of time training students who had no intrinsic interest in material fabrication. What were they interested in?
I was spending a lot of time training students to use them all. So I started a class, "How to Make Almost Anything," which was just that — it was how to use the tools to make almost anything. But I was completely swamped with nontechnical students, who were desperate to take the class — not for research, not as a business model, but just because they had stuff they wanted to make.So they had things they wanted to make. He then goes on to talk about what a world were you can make whatever you want will be like.
The passionate response led me to wonder what would happen if the rest of the world gets access to this. So we started setting up, with National Science Foundation support, field Fab Labs, where the idea was to approximate both what was on campus at MIT and where we are going to be 20 years from now, but using tools available today. And [the program] exploded all around the world in both developed and, most interestingly, developing countries. We found the same response in the field as we found at MIT.Now all this has immense social and economic implications. Prof. Gershenfeld goes on to talk about the meaning of what he has learned about man the maker. Read the article to find out his views. What I found most interesting is what he thinks it means for the venture capital world.
These labs were not meant to be all that useful — this was supposed to be a warmup experiment — but at this point we have labs in India, above the Arctic Circle in Norway, in Ghana, Costa Rica, inner-city Boston.
This summer, we are going to South Africa, and we have demands to take these all over the world — more than we can handle.
The thing I think will emerge that doesn't exist yet is micro VC. Personal fabrication leads to the opportunity for high-tech innovation, but on the scale of tens of thousands — not tens of millions — of dollars. You'll need some of the skills of a good venture capitalist, but with the fanout of a microfinance network.I have been having exactly this problem with some projects I'm interested in. The market is there. The product is mid level tech. Not bleeding edge. The rewards are there but it may or may not be the basis for a brand and a business. Start up costs are modest; a few tens of thousands at most to first sale. Investment to full profitability a few more tens of thousands. Three to four months to full profitability. One year to cash out - 100% return on investment - if successful.
Now this is obviously not the kind of deal that the current VC set up is designed to handle. Typically they want to invest millions. Operate for three to five years and cash out - if successful - with a doubling every year of operation.
So the question is how do you make these small deals profitable? Worth the effort of the VC guys. Obviously a lot of rethinking will need to be done on the subject.
A good place to start would be to study how Grameen banks handle their micro finance ventures.
I would be more than happy to work with anyone who is interested in thinking through what is required and making it happen.