I think the article still supports most of the points being made.
1 - Not all of Fuseproject income comes from their royalties/ventures, which gives them some level of potentially more predictable cash flow.
2 - Starting OFF with a royalty based model without the “Street cred” and cash flow is still a very big problem. Most of us young guys don’t have the opportunity to wait 2 years for a product to reach production and start selling before we can realize any kind of profit.
3 - There needs to be a close level of trust at the highest level of the partnership, which makes startups ideal for that type of business model, but not necessarily some of the smaller fly-by-night inventor types or large corporations.
4 - You as a designer need to have a vested interest in the success. I’ve gotten some requests for some very weird products where even with my best suggestions wouldn’t have necessarily made for a successful product, but the person was very committed to their idea and still wanted to see it realized. Sadly while these projects aren’t the ones I’d want to take, you always need something to kick in cash.
I think the difference you’d see between the traditional hourly model vs the royalty model is kind of a linear growth (there are a fixed # of hours in a year, so to increase profits you need to either increase your rate, or your headcount), whereas royalty growth would start off slow but ramp up exponentially if you were able to pull off what Behar did.