Bootstrapped open-source versus VC-funded hardware
During my afternoon run I was listening to The Amp Hour podcast interviewing Jeri Ellsworth who co-founded CastAR, and thinking to myself that doing a VC-funded startup if you're an engineer sounds like a really bad idea.
Jeri and her co-founder Rick Johnson were working on Augmented Reality (AR) glasses at Valve, and started CastAR to commercialise the technology on their own after Valve shut down the project. They did a Kickstarter, but returned all the money to their backers when they raised their first round of VC funding. CastAR shut down in 2017 after they ran out of money, but to hear the reasons why from Jeri herself was illuminating.
Basically, as soon as her investors decided to scale and brought in a new CEO that was aligned with investor interests, she lost control of the company. The number of middle-management employees ballooned, they spent hundreds of thousands of dollars just on renaming the product, and the new upper management were taking multiples of her founder's salary in compensation.
That made me think that an open-source hardware project like Gordon Willam's Espruino is really at the other end of the scale. Each new product is funded through Kickstarter, and then sold through his e-shop and other distribution partners. I noticed that he is also getting donations through Patreon, as a lot of people (me included, see yesterday's post) use the Espruino software with ESP8266 and this provides another channel to fund his work.
While this second route seems hard and doesn't promise massive returns, I think it's less risky than the VC-funded route and a lot more fulfilling. I realise Espruino and CastAR are completely different projects, but I do wonder what a successfully bootstrapped open-source hardware project making consumer hardware would look like.