Damn the Free XO-1.5 Laptops: We Want OLPC Sales!

   
   
   
   
   

One Laptop Per Child has announced they're starting to distribute C2 Test Model XO-1.5 laptops through their Contributors Program.

This is great news for hardware and software developers who are looking to code and test for OLPC. But it pretty much sucks for everyone else.

There is not a week that goes by without someone asking me how they can get XO laptops for their community-based project, their small deployment. XO-1, XO-1.5, and to my amusement, XO-2 and even XO-3 laptops - any XO laptop! They are shocked that OLPC will not sell XO's to them and confused when told about the Contributors Program.

Why? Because the Contributors Program is still a mysterious process where some groups get XO's and others don't, based on... Whim? Chicken bones? Negroponte's fancy that day?

They seek a clear, transparent process. Some way, any way to get XO laptops with certainty.

And let's be clear - this isn't retail sales. We don't need OLPC on Amazon, though that would be the best. A simple, organized XO laptop eBay sale would be enough. Oh and please don't give me that "limited staff, resources" ine - that's just an excuse. ilovemyxo proves that you can sell small batches of XO gear to committed buyers.

So the Contributors Program is nice and all, but it really should be called "XO's for the cool kids," as it just frustrates everyone else.

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41 Comments

Actually the contributors program is not very mysterious.
If you want to develop or test something related either to hardware or software, and you have some idea how to approach it you can get one.

However it is just NOT for pilots. Unless a specific pilot has something exceptional and its outcome will provide a different insight or is in a VERY distinct environment than the other mill+ XOs.

The decision is not made by Negroponte :-) but by an online discussion where basically everyone can participate! You can get some idea from these IRC logs http://wiki.laptop.org/go/Contributors_program/February_19,_2010

Other than that, I would LOVE a no-strings-attached XO outlet out there, or at least to drop the pilot minimum to 20-30 XOs instead of 100. Though it IS true small deployments increase administrative cost both upfront and latter (questions/support).

So as many (including myself) said long time ago: Put a small overhead and give it to retailers! This may be the best solutions.
But let me ask again: Did any retailer approached OLPC on that, and if yes what was the response?
Wayan, what about going into retail business?.... ;-D

We do need an easy XO buying process. You may feel the contributor process is clear and open, but for someone who is trying to pull together a pilot, they want to KNOW they can get hardware.

Funders say "we'll support when you can get equipment", schools say "love to have you, what you want to use?" educators say "where's the curriculum".

The "well there's a Contributors Program I have to apply to first" just doesn't cut it.

I don't wanna sell XO's, but I would do it in heartbeat if OLPC sent me a few hundred. I would set up an eBay shop and sell them like hotcakes - at cost + cost of intern to run it. Or turn them over to ilovemyxo to sell.

The point is that OLPC should not be waiting for a retailer to approach them, or be thinking in the 1000 units a day level that retailers do.

XO laptop sales can be done easy & with cost recovery. Just takes the will.

I agree.
The point if OLPC does not/can not do it, can someone else do it? eg does OLPC allows it?
To put it even simpler, do you actually sign a contract that if you buy 100 XOs for a "pilot" you MUST use them for THAT pilot?... ;->
Does anyone knows the answer to that at least?

"XO laptop sales can be done easy & with cost recovery. Just takes the will."

It takes a sizable capital, logistics, and effort. See my post further below.

Managing those capital costs and logistics is the heart of the game for the big computer manufacturers. Compaq/HP, Lenovo and Dell move a huge volume, but actually earn or lose money on whether they planned and executed their logistics right.

And you need that financial/logistics backbone to play the retail / small sales game.

It's easy to complain. Hard to do.

The name of the game is: capital, warehousing and logistics to order a run of XOs.

If you can...

  • put together around 1 million USD,
  • pick one keyboard and one model of power supply for the 5000 XOs you'll get,
  • transfer it in a Letter of Credit to OLPC,
  • arrange for warehousing close to the factory
  • wait ~3 months until they appear in the warehouse
  • organise the sales and delivery logistics (inc transport costs, import taxes and transport insurance)
  • for sales you'll need to factor in all the work involved, plus capital costs and risks
  • keep an eye out for additional complications... for example
  • - some countries ban imports that don't come with appropriate power supplies, or with localised keyboards
  • - other countries won't allow you to sell without customer warranty
  • - olpc may not have certified the XO or the power supply in some countries, and the costs and work involved can be high
  • - shipping companies straight-out refuse to insure laptop shipments to some locations, and generally costs vary wildly

It is a huge job, it requires a sizable chunk of capital, and it is very risky. You can lose the capital, you can lose your personal reputation if laptops are lost, damaged or seized by customs.

Anyone who thinks the demand is there, and justifies the investment of capital and effort should go for it.

As a business model, it's cheaper and easier to setup a website using someone else's project name and criticize...

I've spent many hours over the past 2 1/2 years thinking about and discussing this topic with many people. At the end of the day I find myself generally agreeing with Martin here: OLPC should NOT get into the business of selling laptops. Having had some insight into the work that goes into making something like G1G1 2008 happen here in Europe I understand the massive amount of resources, both financial and time-wise, that such an undertaking requires. And OLPC should really be focusing on something else.

Having said that I do believe that finding a reasonable figure for a minimum order would be in the interest of one laptop per child. 100 is too much IMHO but then again 10 or 20 might be too little. From what I've seen and heard in the past I tend to believe that something like 50 XO-1/1.5s could/should be a reasonable solution.

Christoph,

Agreed, OLPC should not get into the business of selling laptops like a G1G1 2007-8 process.

That doesn't mean OLPC should not sell laptops AT ALL.

OLPC can sell small batches (make it 50) at a time. And it can do it without the overhead that Martin suggests and you assume. And without the drama of the Contributors Program.

Too big, Martin, you're thinking too big. Again, OLPC doesn't need to set up HP-level retail sales for XO's. It needs to have a way for people to buy 20, 100, 250 laptops easily, at maybe 500-1000 XO's per month.

But to do that doesn't take all the overhead you're suggesting. You can sell them via eBay with a decent stock. Or set up a transparent pre-order system that buys in bulk when X number is reached.

There are tech companies that sell computers every day that are not at HP levels. And they're profitable at it. OLPC can do the same - with will.

The frustration at seeing what we all want so close in front of us, and not being able to touch it, is understandable and excusable. It prods us to think whether we can find solutions. The step from there to ignorant armchair pontification, while understandable, is much less excusable.

"For every problem, there is a solution that is simple, obvious, and wrong."

H. L. Mencken

As a former high-tech market analyst and part-time mail-order Free Software vendor (we charged for printed manuals, media, and shipping), I can verify everything that Martin says about the difficulty and expense of supporting small batch or individual laptop sales.

For everybody who says, "Why don't they just...?" the answer is, "You can't just..." You have to do everything else required by law, custom, and economics. Venture capital, legal structure, staffing, sales and marketing, import/export (paperwork, shipping, duties,...), insurance, legal fees, partnerships, teacher training, customer support in multiple languages, warranty service,...You might have to get involved in providing electricity and Internet in order to do it right.

If anybody can show me the money and organization and a workable business plan, I will join you to provide XOs to anybody who can pay for them or get a grant or donations. Or if you have the money, I can show you the Earth Treasury business plan, and we can adapt it to available funds, target markets, etc.

I would like nothing better. If not, don't criticize what you don't understand and can't do yourself. Educate yourself instead. That's what this program is, right? Education?

I can supply a reading list to get you started, with some Adam Smith, Amartya Sen, Thorstein Veblen, Joseph Stiglitz, Jeffrey Sachs, William James, John Dewey, Jean Piaget, Seymour Papert, Alan Kay, Bryan Berry, Doug Engelbart...Then we can get into international accounting, auditing, dealing with corrupt governments, management in general, assorted legalities...That will do to begin with.

All these are indeed needed for a _global_ XO sales business.
What about a an Amazone.com/us/ store-front? Do you still need support for 10 languages, to educate teachers, deal with governments, study Adam Smith and everything else?

I had the idea from ML's suggestions that $200k for 1000 XOs, and assuming business risks and liability will get you there. Are you saying it is not the case?

"Or set up a transparent pre-order system that buys in bulk when X number is reached."

Now that's an idea?
What about a pre-order system, that will order and ship in batches of let's say 1000 in countries that do not make it a nightmare for business.
At $250 per unit should be enough to cover cost overhead and a small return. Add an explicit agreement about warranty and support and you are good to go!

What's wrong with this scheme Martin?

Even simpler - ship only to USA addresses. If they have the where-with-all to get the $$ together for 100 XO's, they can find a way to get it from USA to their location (especially since I would say most are US orgs to begin with)

Ok - just do it in the US. Find a lawyer that tells you the ins and outs of recycling requirements & costs and whether you can wiggle out of customer protection laws WRT warranties.

But be honest and use your own name for the project / company you form to do it. OLPC has its own demons to fight without random strangers claiming they are olpc-something.

What's wrong?

- For most countries $250 doesn't cover shipping, insurance or import charges. Just ask DHL instead of asking me!

- ... except for advanced nor-western countries that have good infra and low import taxes but _definitely_ make it a pain to sell electronics, with consumer protection laws, restrictions on selling stuff with the wrong power sockets (specially for kids gear!), hard requirements on registering with recycling authorities and paying recycling duties (in bulk, and per-item).

The pre-order system can be done, but someone must put their name and reputation to it, as you are expecting buyers to pony up money with the promise that in ~3 months at the earliest they'll get their goods. My school gathers a few thousand for a classroom or two -- will it ever happen? When? Who has the money in the meantime? What if they vanish?

eBay in general works if you're moving a few items, you're flying under the regulatory radar, and a few unhappy buyers don't harm you. By the time you have enough volume to organize a shipment of XOs, you're probably dealing with numbers that will get someone knocking on your door with questions.

Or at least customs seizing the shipment, which I'd expect for any classroom-sized order.

Maybe there's a grey area that is workable -- but I can't say it's there, or that it'd be easy.

Now we're getting somewhere, Martin. So you're that the reasons we don't see XO sales is that:

1. XO laptop order process is 3+ months
2. OLPC doesn't warranty its products
3. XO's may not be safe for children
4. XO's don't have global plugs
5. OLPC has no recycle process

If that's true, why is OLPC in laptop business to begin with? And how does it sell XO's to governments now? Going around 1-5 by talking with Presidents?

Don't be a cheap troll.

We do all those things but we do in the countries _we are working with_.

The countries you guys are interested in -- reachable with ebay and dhl -- are not our core market so we usually don't.

And the burden of selling any electronics in the UK or any EU country is huge.

You ask what the contributor programme XO distribution is based on. Its nit whim. It's contributions. Those that contribute are sent hardware.

Don't be jealous, its beta hardware. Flaws and all. Unless you're in to contributing and fixing these flaws then why would you need or want one?

So let's recap.
Assuming that an _OLPC-independent_ entity pays and gets 100-1000 XO-1.5s from the next production cycle, are you telling us that OLPC _has no problem_ what so ever what this entity will do with this machines?
Are there any strings OLPC is attaching in this?
Could they be sold as "OLPC XO-1.5" or should they be re-branded?

And the core question that I think all this discussion is about,
is there any OLPC plan to encourage/facilitate any form of grass-root support for the XO-1.5 beyond the contributors program???

Bingo!

"is there any OLPC plan to encourage/facilitate any form of grass-root support for the XO-1.5 beyond the contributors program???"

Sure! There are lots of ways to help. People are majing a huge difference volunteering on various projects (ie: SL, Sugar activities, translations, accessibility, testing....).

Where possible / relevant I try my best to put them in touch with local deployment teams. Lots of ways to support XO-1 and XO-1.5 but most importantly the end users of those machines.

Now... if somebody wants XO-1.5s for themselves, or for their school.... that's not "supporting". That's "getting" ;-)

Note -- I do _not_ speak for OLPC.

OLPC (and you) have never understood that small deployments - getting XO's to schools, communities - is supporting OLPC. that's how you get people excites, parents excited, and governments bought it.

The whole anti-pilot mindset is why OLPC is at 1 million and not 5. Why it's quickly becoming irrelevant in an age of netbooks. And why outside of a small core of hardcore geek believers, the rest of us just want OLPC to get out of the way of getting to the XO's.

There is no "anti-small-deployment" mindset. It is just hard to do. Nobody has the time, effort and money to do it.

Stop whining. Stop accusing. Get off your comfy couch and get it done. Use XOs or whatever netbooks you can get.

Martin,

I already get it done daily. I ship small batches of computers around the world. And I work with a number of companies who do the same. As mavrothal points out, we can also make a tidy profit while doing it.

There is a way, there can be "small" OLPC sales. It doesn't take much in resources. It only takes will.

Right now the will of small deployments is started by OLPC but transfered elsewhere, as Christoph points out, and you even suggest. OLPC is loosing out to netbooks, and once using another platfrom, they'll not come back to OLPC. Nor will thier district, regional, or national governments.

Trace the path of the machines you are talking about. You'll find someone puts several million USD in capital investment to get them made, stock them, and do all the stuff I outlined.

It takes will, a ton of work... and a few millon bucks :-)

Your calls for "olpc, sell me 100" are literally asking for OLPC to sink the capital and take the risk.

IME, most people @ OLPC would love to be able to do this, including me. But a look at what it _realistically_ takes to make it happen, clarifies why it hasn't happened.

Martin what you say is absolutely true, BUT the investment has been made, the warehouse is already there, the production line is running to make machines for this or the other deployment.
So at worse, we are talking a line of credit for few thousand machines (assuming that resellers can not pay upfront) and almost nothing if they do.
Besides no body asks OLPC to stock thousands of machines like G1G1-2. Try a couple of thousands and if they walk you reconsider. If they do not incorporate them in your next deployment.

Guys, the hard part of the job is what is not done. Look at the long list of things to do I nicely put together for your reference -- I didn't list the things that are "already done".

Don't lose sight of that list.

About "(if the potential buyer drops the ball) incorporate them in your next deployment.":

That would be crazy. Guys, _think about it_. By the time you decide they buyer dropped the ball, you have incurred huge costs in capital costs and warehousing. And the laptops have a specific keyboard and power supply, so they are only usable in very specific countries.

Go back to those large costs incurred -- how the hell do you recover them? Go back to my point on how Compaq, Dell and friends make or lose money. If they make money on some machine lines and lose or break-even on others it's ok, as long as they aren't in the red.

For them, it's a bit of a gambling game. Now, non-profits can't play in that casino (talk to your friendly lawyer for further clarification). You cannot lose money, but you cannot make money either.

I am not kidding. Really -- don't read this post alone. Go back to my initial posting with the long laundry list.

Fair enough!
So either someone puts down $200k+ to get 1000 machines and do whatever (s)he can with them, independent of OLPC, assuming every risk and liability, or no XO-1.5 small sales.
Is that a safe conclusion then?

"Non-profits cannot make a profit"

While such statements are self-evidently true, perhaps the framing of the statement is missing a point or two.

I just attended a lecture by the founder of Grameen Bank yesterday on 'social enterprises'. He clearly distinguished enterprises from non-profits in that they _can_ and _must_ make a profit, just not pay them to their shareholders. In the context of OLPC, what prevents a thousand or so individuals banding together in a social enterprise, buying the minimum required number of XOs at $199 each, selling them at *$293* each (or whatever is the realistic sale price )?

"Non-profits cannot make a profit" is false.

Non-profit organizations can make a profit, and many do. The Red Cross, World Vision, big NGO's makes billions every year with good profit margins. But they don't call it "profit" - its retained earnings, working capital, etc.

Why, because a 501(c)(3) organization (the official designation of a "nonprofit") says that the legal entity can do almost everything a for-profit corporation can do, except it must distribute its earnings (profits) as a benefit back to its constituency. No profit sharing, stock options, or dividends to stockholders.

So OLPC could, in fact, sell the XO at a profit. and that's generally (if not technically) what it did during G1G1. And as long as OLPC engages in commerce to further its mission (selling XO's would do that) it could sell them for $200 or $2000 per laptop.

Negroponte's real motive is not to get the XO into the hands of kids. He is a control freak. If he it was, he would let anyone, anywhere, make and sell them. It would shock him at the innovative ideas that people would come up with to incooperate into it. I wish I knew how to forward this to him.

Wayan is truly clueless in this matter. Martin's explanation is absolutely clear and irrefutable.

You're getting better at your troll, Irv

"Now... if somebody wants XO-1.5s for themselves, or for their school.... that's not "supporting". That's "getting" ;-)"

This is actually a mistake!
You can support some idea independent of tangibles, but you can NOT support a product (that the XO-1.5 IS) without it. At least not in any credible way.

You get bug reports and hopefully solutions from people that "get" the machine. You get deployment feedback from people that deploy the machine. You get additional functionality and even OSs from people that "play" with the machine. "Getting" is a prerequisite to "supporting" when it comes to products.

Besides the whole OLPC philosophy is "put a (constructivist) machine in their hands and all good things are going to happen". And they do! So supporting and getting are intertwined.

Now you can argue that the expected support is negligible compared to the effort to develop infrastructure for small-lot/individual sales. I could believe it but I would love 2 things.
First of all data :-) There are 60-70K XOs in the wild. How the "return" from those compares to the mill+ deployment machines?
Second, to set the table and invite _independent_ retailers to do the "small sales" job. I know that G1G1-2 almost bankrupt OLPC and is not going to try centralized sales again, but selling (a quite realistic) 5000 machines with $20-30 profit can bring $100-150k in a small company or 8-10% return. Nothing to sneeze about... At the same time will bring in 5000 potential supporters. Even if 10% materializes are more than the entire contributors program!

Wow, I never expected this post to lead to such a heated discussion:-)

Anyway, at the end of the day I think that the contributor's program is a wonderful program that enables individuals and small groups to contribute to one laptop per child. As always improvements can be made (especially in terms of communication) yet in general it's a fairly transparent and efficient process to get XOs out to people who want to contribute.

(Plus historically speaking it's about a million times better than the obscure [email protected] mailbox that was used until early 2008, but that's really a story for another day...)

When it comes to small deployments and pilot projects I think we're moving to a different level in the discussion. Whereas the contributor's program requires relatively little effort on OLPC's side making batches of 50 XOs available to the general public would be a major shift in strategy that involves quite a bit of resources.

And while I do agree that running small pilots and deployments is an important way of contributing there's no denying that IT IS HARD. Plus having actually spoken to quite a few people and seen some of the e-mail exchanges many people who are initially very enthusiastic about doing an OLPC project in their area stop replying once they realize that simply purchasing and handing out XOs to children is not enough (networks need to be configured, machines maintained, parents, teachers and administrators need to be convinced, meaningful learning resources need to be found and/or created, partnerships built, etc.) Hence I think some of the criticism in this area is really coming from people who might think that they want to run a project but probably wouldn't do it when push comes to shove.

There's no denying that this will leave some people with valuable contibutions out in the cold. However some of them, e.g. René Seifert whose story about originally wanting to run a project with XOs in an orphanage in India and later switching to Wipro netbooks when he couldn't get the XOs we previously published, have demonstrated that there's alternatives to XOs that might even end up making more sense. After all, it's not about the technology, right? :-)

There is no doubt that contributors program is great.
There is also no doubt that "deployment" is much more that the XOs or even any additional hardware infrastructure.

However, I do not think that there is any argument either that easy availability of XO-1(.5) is of value too. The only question is if the value could justify the required resources.

My suggestion to that is for OLPC to set the terms so _others_ can make them easily available to the general public/small deployments. How many resources would this require?

BTW, I do not see any "heat" and is getting cold ;-)

It's interesting that OLPC already has independent xo laptop parts suppliers - I can by screens and keybaords from ilovemyxo - so they do know how to authorize and work with outside vendors. You would think they could replicate that arrangement with xo's themselves.

Why don't they just make them available for $400 each?

distribution in china would require an investment of less then 50.000usd.
all the distrubution and wharehouse problems could be outsourced.

seen many poor children here, but none with an XO laptop.
conclusion about non profit organisations

-do not function effectively
-they are often corrupt at top management
-they fool gullible donors into giving money, but results are often just a few pictures of poor children looking cute!

distribution in china would require an investment of less then 50.000usd.
all the distrubution and wharehouse problems could be outsourced.

seen many poor children here, but none with an XO laptop.
conclusion about non profit organisations

-do not function effectively
-they are often corrupt at top management
-they fool gullible donors into giving money, but results are often just a few pictures of poor children looking cute!

I have followed OLPC since day 1. I emailed Negroponte early on that the way to get it into the hands of children is to market it like everything else is marketed. He would not listen.

He knows nothing about marketing and is not interested in learning anything about it.

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