When I was in middle school in the 70’s, Popular Science was my bible. I was a devoted subscriber and anxiously awaited the arrival of each new issue (and still do!). To now have a product that’s been recognized by them is a genuine thrill.

We are honored to have made the Best of What’s New in ‘08 list. Thanks to all the editors at Popular Science.  We appreciate your support and recognition.

Now the goal is to keep up the pace of innovation and earn ourselves another place on the list in 2009

We’re putting the trials and tribulations of our first large scale production run behind us. We have settled in with two New Jersey based manufacturers to build our BUGs and are very pleased with the results. Thanks to everyone for their patience and support.

Starting November 17th we will start shipping the latest BUGbundles to customers with a goal of having ALL backorders fulfilled by December 1st. From that point forward we will be in a position to ship all our customers their new BUGs within 2 days of placing their order. We also have a number of exciting, new modules coming available within the next few weeks so stay tuned!

One of our investors, Tom Evslin, posted a terrific piece yesterday on the importance of the latest FCC decision re TV white spaces. I encourage you to read it. He includes a couple of very compelling graphs that manage to convey everything necessary to convince you that openness is beneficial to innovation. I’ve copied one of the graphs here at the left. Click on it to see a larger version. In essence the flat-line at the bottom depicts the number of new devices being introduced that use licensed/controlled frequencies. The other line, the one shooting straight up, depicts the number of new devices being invented that use Wifi, Bluetooth and other non-licensed (aka open) frequencies.

The graph tells the whole story. If you want explosive innovation, you won’t get it via restrictions, limitations or taxation. You get it by lowering the transaction costs to zero. You invite anyone and everyone to the party. You don’t shy away from creative chaos. The most successful companies of the next ten years will strategically understand this.

I read with chagrin the latest news from Dash Express. These are clearly tough times and we wish them luck with their new model.  But I think this actually points to something far deeper and more seismic: there is literally no future in the traditional model of consumer electronics (CE). There’s no there there. Anyone thinking of investing in it the way it’s currently constructed is crazy.

It is beyond difficult to innovate in hardware today. There are literally only a handful of players doing it well. And even they are just moments away from catastrophe if they can’t keep the hits coming (hi Motorola). Compare this to the world of software where thousands of developers are innovating on a global scale.

Does it HAVE to be this way? Is it written on stone tablets somewhere that the current method of creating hardware is the one and only way? Of course not. Just like it wasn’t ordained that all computing was to happen on mainframe computers, or that all knowledge of the printed word belonged to the elite. Change in both these examples came as a result of innovation-enabling technologies; new tools that allowed whole, previously excluded, groups of people to learn and benefit.

Right now, the whole world of electronics is hamstrung by what feels like a lack of equivalent enabling technologies. The result is that everyone loses. Investors lose because because their returns are subject to a completely unpredictable hit-based financial model. Producers lose for basically the same reason. Consumers lose because the attendant lack of innovation and lowest-common-denominator products restricts the value we could actually be deriving from new technologies.

Imagine if Dash could have built its product using both open source software AND hardware IP. I guarantee they could have brought it to market faster and at a fraction of the cost. That, in turn, would have freed up some of that $71M for other investment areas like retail distribution, international markets, etc. The point is, you shouldn’t need massive resources from huge firms like Sequoia and Kleiner Perkins to innovate in hardware. You sure don’t need it for software anymore.  The hardware world needs a 21st-century, bottoms-up,  open source model of innovation.

I know it seems incredibly self-serving to try and proclaim the emergence of a new revolution. And, of course, I can’t say that I’m not personally invested in its success, but irrespective of whether or not Bug Labs will play a meaningful part in it, the forces of disruption are coming.