I suggest a hybrid model.
OLPC Boston is a non-profit that develops and designs computers but manufacturing and distribution is outsourced.

This is happening a bit - manufacturing is in Taiwan and China by Quanta. Set Quanta free to sell it everywhere. Freely license the design so half a dozen chinese factories start making copies. Keep tight hold on the trademark - the name OLPC, Children's machine, the green and yellow appearance. This will kill the G1G1 scheme but will put a million laptops into the hands of users and developers around the world. Only those with the full spec (and who pay a fee) get to use the OLPC logo.

Have all distribution and commercialisation done by others. Use other local maintenance companies who have contacts and experience and political connections to distribute and support the computer in schools. Try and get at least three of these in each country, each doing different schools or regions, so you can get some competition going. Have Cambridge provide (and charge for) training and certification for these.

Distribution to the general public to be arranged by the manufacturers.

Go on bended knees to beg Walter Bender to bring Sugar Labs back in house - this is the crucial bit you need to do in Cambridge.

Note that for schools OLPC should position itself as consultant and adviser to the government for arranging funding, specifying the laptop and choosing the supplier instead of acting as one supplier, competing with Intel etc.

Collaborate with Intel and others to make sure they have an OLPC compliant machine. The more OLPC compliant models there are competing in the marketplace the lower the price.

Are my ideas spreading? I absolutely agree that OLPC should go for profit, and I made this point on my blog a while ago: http://pegobry.tumblr.com/post/39484855/one-laptop-per-child-should-go-for-profit-not-give

The reason for Negroponte's failure is NOT being or not being a for-profit entity.

The project failed because Negroponte never came close to delivering on any of his major promises: $100 price tag, human-powered charger, functional OS, long battery life, classroom integration plan, code view, etc.

To this day, the XO remains an unfinished product. Negroponte's solution? more promises (XO2) that will not be kept...

The most brutal consequence of being for-profit is that charity money would no longer come in. This enterprise might well fail if it actually had to _earn_ enough to keep going.

As for the essay's argument, point 1 (business mindset) would certainly be an improvement, but the other two are hardly obvious consequences or beneficial *to OLPC*.

Of course, the outcome of OLPC as a for profit entity is entirely speculation. In a business sense, it was introducing a new product in uncharted markets. In a humanitarian sense, it was an attempt to radically reform education. No one really knows what the possible outcomes are, so the run of the mill western style business ideology probably would not have worked. (Note, I'm not saying that a for profit entity would not work. I'm saying that business as usual would not.)

One thing is almost certain though. The OLPC would not receive the same degree and types of contributions if it had adopted a for-profit model. Businesses would have been scared away from giving money to and organization that could be very real competitors. The G1G1 program probably wouldn't have been as successful, because some people did participate for the gadget *and* to contribute. High quality talent would be harder to recruit, because it would be based solely upon monetary gain. The value of the OLPC mission statement would have been diminished to meaninglessness. They would still have open source software to work with, but they would have seen fewer independent and creative products. ISVs would shy away from the XO because they could not charge as much for their software (a class/lab set of education applications often costs in the thousands of dollars) and because they would not have the linguistic or cultural background to develop the products.

So please get off of your high horse of the creed of greed. It's very doubtful that it would not have met with success, and if it did it would be because it took a radically different approach from traditional western business models anyway.

The idea for intel was to give Windows xp to make the world submit to the fact that "Windows was ok" and if olpc had an intel chipset yes it would be faster but it would that once xp is ported to the xo the linux/sugar os dissappears

Signed,

Masquerade

I would be more convinced if the article mentionned at least one product that is best delivered by a non-profit rather than by a for-profit. If I cannot contrast the XO with such a product, I have no evidence that going non-profit is not-relevant, I have only a few clues that going for-profit could be relevant.

Hi Mark and editors,

Is Mark still at Intel? The bio above implies that he is but the article implies he is not. You may want to update the bio if needed.

Its a big difference on reading this. Maybe its just more FUD for the company or maybe its meant to help the industry build better products for kids.

In any case, its an interesting perspective. I'm not sure OLPC needs more people telling them how to run their business, especially Intel people but it never hurts to hear the full story.

I'm wondering about this blurb from the third part:
"Intel’s sales people start working with the ministry of education, showing comparisons betweent the two products, etc. The government changes its mind, decides to go for Intel’s Classmate"

How does Intel compete with the Classmate vs. the XO? Is it just great sales people working their relationships or is it features (OS, applications, performance, what?) or is it price or support or something else?

Do we have any real examples of why one product was chosen over another in a given country? I look forward to the Mexico story from Mark too...

Is it a matter of being able to convince the purchasing decision makers or is it really a matter of a better learning experience for kids?

This market is still a long way from mature. In terms of for profit or not (AKA open source vs closed?) it is what it is.

The game is on, let's compete and see who can build the better product!

that intel is trying to beat the xo-2 with the classmate 3 is agreeable since the os is diffrent then the xos but the classmate vs the xo1 was not worth it as the eee pc was already doing that

Signed,

Masquerade

i do beleve that the time is right for a cloudtop Xo prototype

Masquerade

Mark Beckwirth makes two wrong assumptions. One is that NN wanted olpc to be a great commercial success. On the contrary, if olpc when broke after a few years but it stimulated the computer industry to produce cheap educational computers, and the educational establishment adopted the constructivist approach, then NN would consider the effort to have been an incredible success.

Second, Intel definitely does want to kill olpc. That is because the xo undermines Intel's business model, pursued with the oem's and Microsoft, of selling high-end, high-margin chips and ensuring that cheap laptops are unavailable. Mark, don't play dumb, you are perfectly aware this is so.

You know, if olpc were really such a failure, then everyone but a few nutcakes would have realized it long ago and gone on to discussing other topics.

The proof is in the pudding, as they say - since OLPC has delivered 10X as many XOs, according to some reports, to the developing nations than Intel has its own ClassmatePC, it seems that Intels for-profit, not to mention its "500-pund gorilla" status in the market, hasn't helped Intel much...

"Look where the early “best people” are now. For example, Mary Lou Jepsen, the talented designer of the XO laptop screen.."

Didn't Jepsen move from Intel to OLPC (and according to her, took a 'cut' in salary) to work on her new inovative screen - surely it tells you something about the stifling culture of the for-profit Intel (and others) and also explains why ClassmatePC design has been always so far behind OLPC's XO...

What OLPC is trying to achieve is to first of all:

1) create an Alan Kay's Dynabook-like computer educational device (and not just sized-down conventional laptop) targeting small children at the primary school level,

2) focus on producing such a device resulting in the lowest possible price to maximize affordability of such devices in the target markets - ie. developing nations.

If we take Intel's, or other for-profit players' in the market, history it's clear that their very own, for-profit, nature resulted in perfectly orthogonal efforts to the ones listed above...

Ah, and for those who haven't read it yet - here's the article which so upset, not surprisingly, the Intel's executives - the required reading for all those who follow OLPC's story ;)

The Sunday Times, August 10, 2008
"Why Microsoft and Intel tried to kill the XO $100 laptop"
( http://technology.timesonline.co.uk/tol/news/tech_and_web/article4472654.ece )

"This competition would barely be newsworthy if OLPC was a for-profit company… competition is just a standard part of doing business in the corporate world."

Losing to an entrenched monopoly is a standard part of doing business in the corporate world. The whole problem with Intel and Microsoft attacking OLPC being newsworthy is that they attacked an entity that is intended to be beyond competition.

@Joe
Very good ideas, I agree with most of the points. Especially with the one to make the XO available to everyone and to have distribution organized by the licensing companies.

However, I would suggest that different colors and minor changes should be allowed if a producer wants to create an adult version of the XO.

@Masquerade
Please, stop spamming this forum with irrelevant stuff.

This article is ridiculous. OLPC had to be a non profit organization.
Nobody (except in the USA maybe) would trust a commercial company claiming to do 'something for the education of the children').
Who believes intel wants to help developing countries with the Classmate ??? Do you ?

The nature of our free markets make every entity in it to strive for measureable(i.e. short-term) profit. This is why we don't have a society where 95% of the population have the choice to either work their ass off or get unemployed. The efficiency of todays industry and IT was supposed to make life easier.

In the persuit of profit, the companies even took over the political system. This is why we have wars over ressources. This is why we have "consumer societies". This is why we are still burning down our natural ressources and exploit poor countries, keeping their development status well below ours.

Free markets are good on a national scale as long as there is a growth potential of at least about 5%. After that, the construct only survives by feeding on the population. Growth rates of 2 or 3% do not reach the general population.

Sorry for posting off-topic.

@sola

as i am not a bot computer but a accual human.
and as i do not know how to / think i cant guest write
i post comments instead

@marc i could not agree more

*i belive the world has changed*

Masquerade

I don't think it's quite as cut-and-dry as Mark puts it - certainly OLPC has found (and created) a competitive marketplace. It has a vibrant software ecosystem and a nascent hardware/addon one (and could easily have more of an ecosystem). What it lacks, severely, is the business mindset.

The non-profit decision I will posit is not the death of the project - but a much more flexible distribution of the laptops, plus either a for-profit (hybrid, as mentioned above) model to sell the units in the developed world (thus creating/encouraging an even more active ecosystem), would have helped tremendously.

I think your point of view is only based on an ideological belief that everything is better when based on business and markets.

The way OLPC is selling the laptops can be discussed. G1G1, GiveMany, etc.
But not the non-profit nature of the organization.
One year ago I was balancing between investing in EeePC 701 or investing in XO laptops for our projects. Now that we can see the evolution of 'sub' laptops like the EeePC : the multiplication of models, the increase in prizes, I see I made the right choice by choosing the XO.
The XO will still be there after 5 year, it will still be useful for education and will still be supported by the community.
EeePC 701 is already obsolete now ! After 5 years, they will all be recycled. NGOs cannot afford to replace their equipments every 6 months.

@pepe:
"Free markets are good on a national scale as long as there is a growth potential of at least about 5%. After that, the construct only survives by feeding on the population. Growth rates of 2 or 3% do not reach the general population."

Sorry, but I completely disagree. Free markets only work if there are rigorously enforced rules. Freedom is not natural, but has to be vigorously guarded. If not, one party or group will take over power and start rent seeking (extortion).

Think of the Indian Maharaja courts. India was one of the richest "countries" in the world, but a total of 25% of GDP was squandered at the royal court(s) alone. The result, a people too poor to defend themselves.

The idea that a free market exists without fierce government (and popular) supervision is a political fairy-tale. One that is broadcasted by those who want to take over the economy. Never in history have there been free markets of any kind without some armed power protecting them and enforcing their freedom.

What the original article is saying is just that for-profit businesses have strong incentives to work effectively and efficiently. They might still be robbed blind by incompetent owners. But that happens to non-profits too.

Winter

"What the original article is saying is just that for-profit businesses have strong incentives to work effectively and efficiently."

No, they have strong incentives to efficiently produce profit. Sometimes it translates to efficient service to consumers. More often than not it translates to efficient manipulation consumers and other entities involved.

This is why in most supposedly technology-driven places Sales and Marketing are treated much better than R&D, IT, Engineering and Production departments.

@teapot:
"This is why in most supposedly technology-driven places Sales and Marketing are treated much better than R&D, IT, Engineering and Production departments."

Which might be just what is needed to get the products in the hands of the people.

The PERFECT product might exist, but if the consumers don't know about it or cannot buy it, that is rather useless.

The previous G1G1 was a perfect case: A Good product with a large market and a lot of demand. But with horrible sales and shipping.

The result: Too few were able to get the product they wanted.

Winter

@winter:
"Too few were able to get the product they wanted."

Heu... I think you forget something. The target group for the XO was never the north american people, it was the developing countries.
G1G1 was something 'special'.

"Which might be just what is needed to get the products in the hands of the people."

Oh, (North American) people will get the product. And the product will cost the magical number $400. And will be a rebadged MSI or Sager (what most of laptops are now).

Wow, where to begin on responding to some of the comments.

@Greg ... you correctly pointed out that the original BIO is wrong. I am no longer at Intel, having left the company in January to take a year off to do things like this (blog) which is not easy to do in a full-time job. I have sent in an update to the editors of the site.

On your question ... "How does Intel compete with the Classmate vs. the XO? Is it just great sales people working their relationships or is it features (OS, applications, performance, what?) or is it price or support or something else?"

Both ... you need great salespeople and the features they need. Governments have very bureaucratic processes in purchasing PC's ... many times there is a minimum specification. Sometimes a good sales person needs to influence the spec. And so on ... I plan to blog about the challenges of selling to government at some point (so much to talk about).

@joe (first comment) suggested a "hybrid" model. I like the idea in concept but it needs to be thought through carefully. It's likely the firm will have a split-personality perspective (the shameless profiteers vs. the do-gooders?). The key word is collaboration which may be easier to do with a for-profit company and another company (for-profit or not).

@Irvin believes that OLPC "failed because Negroponte never came close to delivering on any of his major promises ..." Negroponte did what many leaders do ... over-promise, setting expectations way too high. He made it a nightmare for everybody setting the expectation of a $100 laptop which was and is still an impossibility no matter how many you buy at a time. This tactic can work sometimes to create attention and motivate your team, but that is rare and should be used sparingly.

@Jordan said "please get off of your high horse of the creed of greed. It's very doubtful that it would not have met with success, and if it did it would be because it took a radically different approach from traditional western business models anyway." I knew I'd rile up the anti-capitalist crowd with this post. The business mindset is the biggest advantage, and I happen to agree that alternative business models are needed.

Capitalism is tied for better-or-worse to greed and exploitation. Capitalism completely unchecked can have major issues. But it creates prosperity for millions in a country, not just the executive fat-cats. China embraced open markets and competition and have raised many people out of poverty while creating hope and opportunity. I personally like how Bill Gates terms the capitalistic approach in emerging markets: creative capitalism.

@eduardo montez says I make "two wrong assumptions. One is that NN wanted olpc to be a great commercial success and Intel definitely does want to kill olpc." I know NN didn't want commercial success ... he wanted a laptop in every kids hands. The point is how can he deliver a billion computers without enabling the entire laptop industry or creating a company that could deliver to his vision. And Intel does not want to kill OLPC. That want to kill the AMD chip that OLPC uses and replace it with an Intel chip. Remember, Intel only makes money on the chips, not the rest of it.

@delphi says that "If we take Intel's, or other for-profit players' in the market, history it's clear that their very own, for-profit, nature resulted in perfectly orthogonal efforts to the ones listed above..." Intel nor Microsoft may ever be truly successful in this space ... the jury is out. Read Clayton Christensen's book "Innovator's Dilemma" and you'll see why. Whoever wins here will have a true disruptive innovation ... something that is more affordable, more easy to use, and add a value that they currently don't get in a PC. But I believe if the company that delivers that is for-profit has a better chance for the biggest impact (e.g. most laptops out there). It could have been (and could still be) OLPC.

@Marc Valentine said "Who believes intel wants to help developing countries with the Classmate ??? Do you ?" Yes, I did. And Lila Ibrahim, who now runs the group, does too. It was the best job I ever had because I could make my group/company successful and make a difference in the world at the same time. Not sure what's wrong with creating a successful, profitable business while making a positive difference in the world. By the way, Intel spends $100M a year on education programs as part of their philanthropic programs. They can do that given they bring a significant return on their investment.

@Miko: "I think your point of view is only based on an ideological belief that everything is better when based on business and markets." Yes, it is my belief that markets and business provide a better approach to serving a specific need (with the exception of public goods like police, etc.)

@Winter: "What the original article is saying is just that for-profit businesses have strong incentives to work effectively and efficiently. They might still be robbed blind by incompetent owners. But that happens to non-profits too." I couldn't have said it better myself.

Great to see this debate.

Mark Beckford
http://www.disruptiveleadership.com

Mark, thanks a lot for your comments, I have also updated your bio information accordingly.

@Mark : "By the way, Intel spends $100M a year on education programs as part of their philanthropic programs."
So why Intel didn't start the Classmate as a complete philanthropic program ? Selling education products/devices on one side and giving money to help eduction on the other side... that is called 'conflict of interest'. In many countries it is against the law.

@Mark : "China embraced open markets and competition and have raised many people out of poverty while creating hope and opportunity."
That is completely wrong, go and see the millions of people in India and China struggling to survive. Opportunities are only offered for a very small middle class. And this small middle class is not ready to share anything with the rest of the population.
Public education is still non-working and corruption is everywhere. I am strongly against the idea that development could benefit from capitalism.

@Marc Valentin:
"That is completely wrong, go and see the millions of people in India and China struggling to survive."

No, that is completely right.

China is one of the FEW countries that succeeded in reducing poverty on a grand scale. Indeed, hundreds of million of Chinese still live in poverty. But that is discounting the hundreds of millions that do NOT live in poverty anymore. But still did in 1990.

If it was not for China, there would have been hardly any reduction of poverty in the world during the last decade or so.

The fact that you do not like the Chinese government/ruling class/political system is immaterial for their progress.

Winter

"The fact that you do not like the Chinese government/ruling class/political system is immaterial for their progress."

The only reason why China bothered to do anything about poverty was the fact that all its supposedly capitalist system is being run by Communists, who don't trust market, and manipulate it to achieve goals that are compatible with their ideology -- development of industrial infrastructure, providing employment and social structure, reduction of poverty.

India, on the other hand, has no such force manipulating its economy, so it more or less welcomes any business development, including ones that can't possibly provide anything to the local population other than getting money from foreign customers for a while when India is poor enough to provide some service cheaply. As a result its reduction of poverty over the same time was not nearly as significant with current poverty rate 3-4 times of Chinese one -- and India started from a far better condition in 70's.

Of course, those facts are not trumpeted by current fans of capitalism and especially its colonial variety practiced in developed countries. One can criticize Communists in general and Chinese ones in particular until the cows come home, however the fact that they are manipulating the development of economy has clearly positive effect.

"I knew I'd rile up the anti-capitalist crowd with this post. The business mindset is the biggest advantage, and I happen to agree that alternative business models are needed."

The "anti-capitalist crowd" that does not share the ideology dominant in US is approximately 6.5 billions of people -- and that's an estimate that assumes everyone in US to be a fan of it.

Yes, your ideas are THAT unpopular in the world.

"I knew I'd rile up the anti-capitalist crowd with this post. The business mindset is the biggest advantage, and I happen to agree that alternative business models are needed."

The "anti-capitalist crowd" that does not share the ideology dominant in US is approximately 6.5 billions of people -- and that's an estimate that assumes everyone in US to be a fan of it.

Yes, your ideas are THAT unpopular in the world.

"The only reason why China bothered to do anything about poverty was the fact that all its supposedly capitalist system is being run by Communists, who don't trust market, and manipulate it to achieve goals that are compatible with their ideology -- development of industrial infrastructure, providing employment and social structure, reduction of poverty."

If the Chinese leadership is lying awake at night about "social" issues it is about two things only:
- Getting work for all those village people that are not needed anymore in agriculture and move into the cities
- Avoiding a social and economic meltdown like Russia had in the nineties

Opening up their economy to full scale "free market capitalism", like the Russians did (ill-informed) would produce both nightmares and create instant disaster.

Their third biggest fear is the banking collapse that triggered Russia's meltdown and the Asia crisis in the nineties.

You must be a complete religious fanatic about "Neo-Con Free Markets" to risk an all out civil war in China just to create you precious "Free Market". The last one, the cultural revolution, killed more than 10 million people, and that one was a well organized civil war.

I would be VERY careful if I was in charge of reforming China's economy (and I am very glad the current leadership is obviously much more competent than I am :-).

The fact that they are in it for the dough is, again, immaterial. Your present leader is too, where ever you are.

Winter

@Marc Valentine "So why Intel didn't start the Classmate as a complete philanthropic program ? Selling education products/devices on one side and giving money to help eduction on the other side... that is called 'conflict of interest'. In many countries it is against the law."

Intel firewalls its philanthropic education division. It is funded by the Intel Foundation which has specific rules on how money is spent and how it is tied to the rest of Intel. Trust me ... Intel's lawyers have structured this so it is not legal. They are not allowed to sell or promote Intel products. And I really don't see the conflict of interest. Where is the conflict of interest in providing affordable computers to education (and yes, the sales person will "try" to sell them the more expensive model ... that is their job) while creating a world of more computer literate kids and teachers. Yes, the philanthropic effort helps Intel sell more computers by the fact that there are more people trained and possibly interested, but people gain a great benefit at the same time.

Clarification on the above comment: I meant to say "Trust me ... Intel's lawyers have structured this so it is legal". Likely many will see this as a Freudian slip. ;-)

@Mark Beckford

And trying to sell a more expensive model to a poor country, while good for short term biz, is bad PR.

The OLPC education project should be non-profit, but the OLPC hardware and software engineering projects should be for profit.

To be honest, I think that it is stupid and outrageous that NN is touting OLPC 2.0, when OLPC 1.0 is so rough and unusable. If they would just *refine* the OLPC 1.0 into a more polished machine, then it would be able to better achieve the education goals of OLPC. At present, the OLPC product is more like a exotic EV vehicle toy than a Toyota Corrolla workhorse. It will be a damn shame if they dump the OLPC 1.0 architecture for the 2.0 vision, rather than upgrading the 1.0 with newer components as they become cheaper, etc.

Obviously NN is running this project into the ground (as expected) with his fantastic visions (which doesn't necessarily put education on the table!).

It sounds the plan is to dump the laptops onto countries like Peru, etc., and "let them figure it out" (i.e. reengineer the software into something more reliable and useable). However, what it needs is a couple of hundred professional-grade person-years of refinement. Not sure that these countries are willing to supply that...

The B1B1 pricing model is outdated, since it presumes that competitive computers to the OLPC laptop are 2x the price. It is still the case that the OLPC computer costs less to make than competitors like the Classmate and the Eee. You'd never know it from the pricing model. It is like they are trying to sabotage this project for no good reason. If you needed hundreds/thousands of dedicated developers for a revolutionary platform, most times the hardware would be subsidized; instead, the hardware is taxed! Even though I agree with the cause, given the Eee competition the tax should be more like 15% ($250) rather than 100% and I think that the total revenues (and thus the number of laptops provided to the underprivileged) would actually go up.