Local Motors is an Arizona-based company that makes specialised vehicles, designed in collaboration with a community of co-designers, networked through an online platform. The co-design process enables them to respond to customer needs more directly (as long as the customers are also willing co-designers), and also take advantage of talent in specific areas that they would not be able to access by employing these people as staff.
If we are looking at something that needs metallurgy or material science or integration or controls or flight experience or knowledge of unmanned systems, those are the kinds of things where there is a cognitive surplus of people out there that simply are never going to work for you.1
Contributions are managed under a creative commons licence (Attribution, Non Commercial, Share-Alike). Local Motors manage an attribution and compensation process that includes revenue share:
When co-created products are sold, a percentage of revenue is reserved for all of the contributors. The more value you contribute to the development of the product, the more you grow your share of this contributor remuneration. 2
However, they also compensate contributors in other ways, for example:
- Free access to rapid prototyping tools
- Low volume manufacturing runs
- A lump sum
- A percentage of revenue
- Additional product agreements, like compensating you for t-shirts or prints3
They have built a web-based platform – Launchforth.io – to allow them and their clients to host co-creation challenges, and engage communities of co-designers. While there are many such platforms available, they claim their platform is well-suited to solving complex engineering problems, and that they back up the technology with processes to enable effective collaboration. Jay Rogers, Local Motors CEO, on their platform:
There is a raft of companies out there that can offer a SaaS platform that will tie to a million users, and you can touch them in an instant to do your graphic design or your software design. There is nobody like Local Motors that understands the time required, the idea creation with real suppliers, often suppliers that are already in their network, and can build methodologies and advance to real product commercialization.4
Local Motors currently have a small network of ‘micro-factories’ dedicated to production of specific vehicles. In addition, their most well-established vehicle, the Rally Fighter, a luxury, off-road, sports car is sold as a ‘built, not bought’ product, with buyers helping a team of Local Motors engineers assemble the product as part of the experience.
Local Motors are seeking to disrupt a very large, mature industry, which benefits from many economic and manufacturing advantages. Their success may depend on their ability to take advantages of weaknesses in this model, or in changing macro conditions making the established model less viable. Softer success may come from incumbents adopting some of their processes for their own production, and in the model itself becoming mainstream, even if Local Motors is not the company driving it.
For specialist or luxury vehicles, there may continue to be demand from some consumers for participation in the assembly, but this is unlikely to be the case for mass-market vehicles. If vehicle use shifts to a service not ownership model, this niche may grow to make up a larger proportion of privately owned vehicles.
How is it redistributive?
Launchforth co-design platform: a tool to enable mass collaboration on manufacturing.
Local Motors, as the name suggests, address many layers of the stack of redistributed manufacturing. But their platform and processes for gathering expertise and insight into demand is perhaps their most distinctive aspect, and one which could be adapted by other redistributive projects.
- What markets could this kind of digitally enabled mass collaboration work in?
- Where is there appetite from experts or customers to participate in the process?
- Where is there untapped expertise?
What are the barriers to mainstream success?
- Local Motors designs currently in production are for niche markets only, and are produced in very small numbers. However, in 2017, they introduced potentially their most widely relevant vehicle to date, Olli, an autonomous, electric, mass urban transport vehicle. Can they scale their platform and operations to produce such mainstream vehicles in large enough quantities to compete with incumbent manufacturers?
- Local Motors build some of their production processes on other emerging platforms, such as 3D printing. Their progress towards mainstream success is tied to the development of these platforms.
- Many companies use open innovation processes to collaborate with partners and customers in co-creating products. However, ad hoc contributions by those acting outside of commercially contracted partnerships are typically only rewarded informally, either with prizes, merchandise, free product or recognition. If this method of co-creation is to become mainstream, there may need to be more formal ways of assessing contributions and compensating contributors.
- Provenance: building a system to track responsibility through a manufacturing and distribution lifecycle. Could such a tool be adapted to track and reward contributors to a distributed co-designed product?
Launchforth.io co-design platform
Local Motors CEO On 3D-Printing Self-Driving Buses And Other Projects
Peter High, February 2017, Forbes.com