In this presentation, I cover briefly existing Fab Lab business models (including prominently the grassroots model as described

by Harmen Zijp for Amersfoort). I introduce tools for the development of business models: •  The Business Model Canvas •  A “buy” wordle •  Kevin Kelly’s “Better than Free” •  Persona •  Customer Journey

Contact the author: trox@fabfolk.com peter@square-1.eu This publication is © 2011, Peter Troxler. It is made available under a Creative Commons attribution license. For details about the license, see http://creativecomons.org/ licenses/by/3.0

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The main interests in Fab Lab business models come from two areas

1.  New labs in start-up phase: What are the business models that are suggested / discussed / recommended? 2.  Existing labs, running on subsidies: What are other ways to finance a lab? How can we sustain a lab once subsidies will have run out?

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But first: There is no need for big government funding, and there is no need to pay people or space with a Fab Lab operation. FabLab Amersfoort proved that. The FabLab Amersfoort was set up alongside the theatre company Spullenmannen in a space they were renting anyway. Investment was kept down to ERU 5000, and staffing was secured by trading coverage as lab manager for access time to the lab. Technical details and a 7-step guide that adresses all the major questions is available at http://fablabamersfoort.nl/downloads/fablab-instructable.pdf

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A team of fabfolk, including Sherry Lassiter, John Boek, Markus Hormeß and Peter Troxler inverviewed lab managers from Barcelon (Spain), Amersfoort )Netherlands),

Manchester (England), Vesmanayer (Iceland), Lorraine County Community College, Elyria (Ohio, USA), Nairobi (Kenya) and Soshanguve (South Africa) in 2011. Main findings were:

The main funding models were grant-based, embedded in institutions or operating as a prototype shop. Other streams of revenue included access fees and educational activities. Other models that were discussed, but where little real experience was available, are the enabler, the incubator and the network model. Additional ideas were “techno tourism” and “gurus for hire” where managers of existing labs offer their insights for money to new labs. Labs typically used a mix of these models. To achieve a transition from an (entirely) grant-based to a different model, this transition has to be sought from day 1 of the lab, as the Manchester experience showed. Source: Boek, J. and Troxler. P (2011). Sustainable Fab Labs. Presentation to the Fab7 conference, 17 Aug 2011. Kirkby, E. and Boek, J. (2011). Sustainable Fab Labs. Presentation to the FabAcademy, 25 May 2011.

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Establishing a business model for a Fab Lab requires to balance the ways to make money with the need to spend money. The Business Model Canvas can be a helpful framework to analyse, model and discuss both sides of the equation. The model coinsists of 7 buidling blocks which are then translated to cost and revenue streams. An organisation serves one or several customer segments. It seeks to solve customer problems and satisfy customer needs with value propositions. Those are delivered to customers through communication, distribution and sales channels. Customer relationships are established and maintained with each customer segment. Key resources are the assets required to offerer and deliver the previously described elements by performing a number of key activities. Some activities are outsourced to and some resources are acquired from key partners outside the enterprise. Source: Osterwalder, A., Pigneur, Y., Smith, A. (2010). Business Model Generation. Lausanne: Osterwalder & Pigneur. see also: businessmodelgeneration.com

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The moment of “selling” to lab users can be a hard one. The lab (manager) has to make users “buy” a product or service. The above wordle of synomyms for “buy” can help to shape a better understanding, what users are willing to give money for. More inspiration can be found in Kevin Kelly’s 2008 post “Better than Free” (http://www.kk.org/thetechnium/archives/2008/01/ better_than_fre.php). To further gain a better understanding of the interaction of the Fab Lab users with the lab, there are two toolsfrom product and service design that can be borrowed: the persona and the customer journey. A persona is a description of a typical representative of a customer segment. Rather than statistical averages, a persona consists of concrete characteristics that are collected in qualitative market/field studies. The customer journey exemlarily describes the itneraction between a persona and the lab over time, beginning e.g. with the first contact of the persona with the lab and ending only after the persona has concluded their interaction with the lab. For example persona and customer journey templates, see the next 2 pages. The source of the buy wordle has been lost.

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An Introduction to the Fab Lab Persona Template
Persona (ℙ for short) – describe the persona in an generic, but concrete way – e.g. 'An SME looking for support for agile prototyping' Name – give the one person (representative) a name and a specific role – e.g. Robert (Bob) Miller, Chief Designer, CleanShape Ltd. – this is the girl or guy you are thinking of when describing the ℙ. [add photo here] – find a photo of a person that looks like the girl or guy you are thinking of. Make a note of who the person really is (if you know) and be prepared to answer why you chose this photo. Statement / description – Here you describe in which way the ℙis or will be interacting with your service and/or product. This section needs a bit of research: you could interview people who are in the role of your persona, or you might be able to find first hand accounts on the Internet. Try to find a statement that summarizes your persona's intentions or needs in a captive way. Fill in the statement with sufficient details (under description) so others can follow your imagination creating the future customer (the ℙ). Give references where appropriate. Fab Lab Skill Profile – this could eg. be derived from the Fab Academy Syllabus, check at http://www.fabacademy.org/index.php/diploma for an overview.

Key Characteristics – a slightly psychological description of the ℙ Goals – what the ℙ wants to achieve professionally Questions – what is not immediately obvious about Fab Lab for the ℙ Influencers – who or what influences decisions of the ℙ Frustration & Pain Points – things that irritate & frustrate the ℙ

The qualification levels are: A—Expert—able to handle independently all types of assignments or tasks and serves as a role model or coach for others B—Advanced—able to handle independently nearly all types of assignments or tasks; C—Intermediate—able to handle independently many types of assignments or task D—Basic—able to handle only the simplest assignments or tasks E—None—not able to apply this skill

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© 2010 Peter Troxler – This work is licenced under the Creative Commons Attribution 3.0 License. To view a copy of this licence, visit http://creativecommons.org/licenses/by/3.0/

An Introduction to the Customer Journey Template
The customer journey template consists of two parts, the upper part is all about the actions and experiences of the ℙ. The lower part is all about what the Fab Lab has to offer in terms of tools (infrastructure), experts and the network, and how this is done Describe the OUTCOME of the Customer Journey in one sentence here. – Maybe the most challenging part of this form: what has changed at the end of this particular customer journey, for the ℙ and/or for the world. The actions and experiences of the ℙ. Key journey step (activity) – what does the ℙ do? What are their main activities (on a very practical, down to earth level). Frustration / Pain (emotions) – where does the ℙ run into problems in their main activities, what causes hesitation, delays, unnecessary repetitions, anything that blocks progress Moment of truth – what we imagine will help the ℙ to overcome all these frustrations/pains/barriers to achieve their goal

Tools What are the specific Fab Lab tools that we think we could be using in this step of the customer journey – and how do they create 'moments of thruth' for the ℙ, experiences that make the ℙ feel easily overcoming their barriers?

Experts What are the specific Fab Lab experts that we think we could be using in this step of the customer journey – and how do they create 'moments of thruth' for the ℙ, experiences that make the ℙ feel easily overcoming their barriers?

Network What are the specific qualities of the Fab Lab network that we think we could be using in this step of the customer journey – and how do they create 'moments of thruth' for the ℙ, experiences that make the ℙ feel easily overcoming their barriers?

Organisation How do we envisage to organise providing the tools, experts or network effects to the ℙ, what particular conditions, resources, mechanisms, attitudes etc. do we need to have in place?

Square One Dr Peter Troxle r

© 2010 Peter Troxler – This work is licenced under the Creative Commons Attribution 3.0 License. To view a copy of this licence, visit http://creativecommons.org/licenses/by/3.0/