I have known these observations to be true for some time.
You can lease and run your own manufacturing line (SMT) for less than $10K / month..)... why give any profit to another company?
With in 5 years... own it out right.
But it takes more than building the next "better mouse trap" to make a business.
more than design....
more than manufacturing...
more than scalability ...
etc....
The present IP laws need to be changed.
otherwise, any clever new product will be forever restricted to "minor" league status...
reason?
Because the "big boys" will just take the market/product you have created away from you.. in the courts (tied up in legal battles) and the market place (more marketing resources ... by virtue of their extreme monetary resources.
As a consequence ... two major forces have been at work....
example 1)
Foxconn, now bigger than IBM and HP....(manufacturing)
US companies handed their manufacturing over to them... what do they need them for? Marketing and distribution?
Now Foxconn is planning on opening 10,000 stores in China (their own distribution/marketing)....one of the few growing middle class economies in the world.
What's to keep them (or any large Corporation?) from doing the same any where else in the world?
..
Is this bad?.. Western Corporations - through their own greed - have created this situation.
Foxconn is only using what has been giving to them (via business and example).
Example 2:
Variations on the MS model of the 90s...
Small companies develop and prove new product/market... then .. large companies buy em out.
It is already the assumed business model of many small/medium sized businesses. (IPO payday or buyout payday)
after awhile .. it becomes institutionalized ..
It is taught in business schools...
It is taught in high schools...
and this will kill most entrepreneurial endeavors before they are born.
Conclusions?
1- Western business models based solely on monetary ROI.. will destroy themselves..
2- everything in this world is in one of two states ..
emergence or decay.... including business models.
Chris Anderson, best known a big thinker and an author that chronicles the digital revolution, is going decidedly analog.
That’s the gist of a talk the Wired editor-in-chief gave at the Supernova conference in 
San Francisco. I must admit it’s odd to hear Anderson get so wound up about physical stuff. But he got into manufacturing—without any infrastructure mind you—via his DIY Drones venture (right). “This could be the future of manufacturing and the future of the U.S. economy,” he said.
Anderson’s speech, which he used to try out new material that will most likely wind up in another book, made the following points:
- The Web revolution is hitting the real world. “We are entering a new manufacturing age,” said Anderson. “I’ve been thinking about being analog and the world of manufacturing.”
- Manufacturing businesses are utilizing a lot of the techniques pioneered on the Web.
- Tools of production are being democratized. Exhibit A: 3D printers will now run you $750. Anderson has one in his basement. Laser cutters and circuit boards can all be designed in your basement using world class industrial technologies.
- If you want scale, a Chinese factory will work with you where ever you are. “I can click a button and make robots in a Chinese factory move,” said Anderson. “These factories want to work with smaller companies because there’s the flexibility to do so and higher margins. You have access to the same factory as Sony.”
- Anderson chronicled Local Motors, which walks you through designing and building a car. Can this business scale?
The list goes on. Anderson’s big point is that the barriers to manufacturing are falling away. In fact, we may all be manufacturers down the road. Consider it the long tail of physical stuff.
Related: Free is not a business model
Freemium: The first business model of the 21st century
Wired’s Editor Chris Anderson bans words “journalism” and “media”
