Voices: 15 steps to starting your own electronic-kit business is an interesting article. This engineer started her own successful electronics-kit business. Limor Fried has made Adafruit Industries into a successful electronics-kit business. You can too. Based on her own experience, she offers 15 practical steps for engineers who dream of starting their own kit business.
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Tomi Engdahl says:
What Adam Grant Got Wrong About Meredith Perry and uBeam
https://www.linkedin.com/pulse/what-adam-grant-got-wrong-meredith-perry-ubeam-paul-reynolds
Time to take a look at one of the other components of the whole VC/startup/ biztech world — the Entrepreneurial Book. These are the books you see in the airport promising to teach you how to be a better leader, manager, inventor, or whatever you believe you are in 10 easy to digest feel good chapters. I’ve read a few myself and usually they’re like a sugary treat — makes you feel good when you read it, but no long lasting benefit, and might actually rot your teeth a little.
Let’s start with the biggie.
She (Perry) did something that flew in the face of every piece of wisdom she had heard about influence. She simply stopped telling experts what it was she was trying to create. Instead of explaining her plan to generate wireless power, she merely provided the specifications of the technology she wanted. Her old message had been: “I’m trying to build a transducer to send power over the air.” Her new pitch disguised the purpose: “I’m looking for someone to design a transducer with these parameters. Can you make this part?”
In case you hadn’t noticed, Meredith Perry gets plenty of publicity for uBeam, and the press coverage made it very, very clear what she was trying to do. So apparently us engineers are super tech savvy but can’t Google some articles? No — before I’d even replied to the first contact, I knew exactly what they were doing.
Once I get the general idea of what you’re trying to do, I already know the rough specs of what you are looking for. If you give me specs that are different, I’ll try to find out why, whether it’s that I’m not understanding your requirements, or you’re not understanding the issues. The converse is this — if you give me specs, I have a pretty good idea of what you’re trying to do. I’ve shocked plenty of cold callers when I’ve worked out what their “super secret” project is from just a couple of questions.
Then there’s the engineering side of things. If you give me a spec for something way, way different (let’s say less difficult) than what you actually need, I’m going to make choices and compromises in the design to hit that spec, and not the 10x you really want. Like most engineers I pride myself on delivering a good product that meets (and maybe slightly exceeds) your needs in an economical manner —if I overbuild like that, you as a customer will likely be unhappy with the invoice, and reasonably so.
Tomi Engdahl says:
Why Kickstarter Products Fail
http://hackaday.com/2016/05/16/why-kickstarter-products-fail/
It seems every week we report on Kickstarter campaigns that fail in extraordinary fashion. And yet there are templates for their failure; stories that are told and retold. These stereotypical faceplants can be avoided. And they are of course not limited to Kickstarter, but apply to all Crowd Funding platforms. Let me list the many failure modes of crowdfunding a product. Learn from these tropes and maybe we can break out of this cycle of despair.
Failure Out of the Gate
You don’t hear about these failures, and that’s the point.
Failure to Raise the Goal
Ok, you’ve launched, gotten a few blog mentions, got a few shares on Facebook, and you’re shy of your goal.
Failure Through Poor Estimation
Many crowdfunding campaigns are run by people who have never built a product before. This is dangerous because they often take the cost of materials for their prototype and assume they’ll be able to get the cost down in high volumes. This is very wrong.
Cost of Goods
This is frequently underestimated. The wrong way is to take the cost of the prototype components, figure out their 1k volume costs, add a few cents for a box and enclosure, and make that your goal. Yes, components cost less in high volume, but a product that’s manufactured in large quantities frequently has extra parts that the prototype doesn’t, more safety and robustness features, and expensive parts (like cable assemblies) that were ignored in the prototype.
Cost of Assembly
This is related to the Cost of Goods, but is more about human costs and engineering one time parts like assembly jigs. Setting up an assembly line isn’t cheap or easy, and every step in the assembly process take time, which translates to money.
Cost of Design for Manufacture
Designing the test and assembly jigs, refining the product so the parts can be sourced (with backup suppliers), so that assembly is efficient, and so that the product is robust and common failure modes are eliminated. These things take time and expertise from people who do this for a living and aren’t cheap.
Cost of Certifications, Shipping, and Duties/Customs/Taxes
Once the product is designed, there are lots of regulations in lots of countries for how the product can be imported and how it must work in order to be legal. If it has a circuit board, chances are it will need FCC approval in the US and CE in Europe. This testing can vary from a few thousand to tens of thousands.
Failure Through Quality Control
You used the cheapest components possible, you have sloppy tolerances, your assembly team is unskilled and inconsistent, and while the product is getting made, it really sucks. The recipients get unhappy
Failure Through Size
You expected to sell a few hundred units, which you could probably make in your kitchen over the course of a few weeks and deliver on schedule, but you instead have to make and deliver tens of thousands of units.
Failure Through Fraud
This happens all the time. The founders put out a wild and crazy idea that doesn’t work, it gets a lot of traction because it’s cool, raises a boatload of money, and then the founders post some vague updates for a few months before going dark. Or maybe the public discovers their fraud and halts the campaign or gets Kickstarter to shut it down.
Failure After Success
You raised your goal, you made your product, you shipped it, customers are happy, and now… what? Some companies don’t plan for what happens after their Kickstarter, and sadly end up out of business because of it.
Despite the Pessimism
Many Kickstarters have made it work. They leveraged their assets, powered through their problems with only minor delays or cost problems, they grew to be sustainable after crowdfunding, and they are continuing on.
Tomi Engdahl says:
Sarah Buhr / TechCrunch:
Product Hunt launches a shop to let makers sell their products right on the site
Product Hunt is ready to rake in revenue with direct sales
http://techcrunch.com/2016/05/19/product-hunt-is-ready-to-rake-in-revenue-by-selling-goods-directly-on-the-platform/
Product Hunt, the popular aggregation site for apps, gadgets, and other products, has figured out a path to revenue for the relatively new platform – let product makers sell their wares right on the site and take a cut.
It’s a common revenue generation model, but one that seems to have taken some time for other tech platforms reliant on the community to develop. The 10-year-old Twitter and 5-year-old Snapchat are still experimenting with monetization strategies and Pinterest, going on seven years, only adopted a similar sales model to Product Hunt’s with Buyable Pins last summer.
Tomi Engdahl says:
Arrow-Indiegogo Announce Deal: Introduce Crowdfund-to-Production Platform
https://www.eeweb.com/news/arrow-indiegogo-announce-deal-introduce-crowdfund-to-production-platform
Indiegogo, the global platform for entrepreneurs to bring their ideas to life, and Arrow Electronics, the global technology company providing products and solutions that guide innovation forward, today forged a strategic alliance to create a groundbreaking new crowdfund-to-production platform aimed at accelerating the pace of innovation for technology and Internet of Things (IoT) entrepreneurs.
Arrow is integrating its comprehensive design and production platform into Indiegogo’s crowdfunding engine—creating a first-of-its-kind program that will provide qualifying Indiegogo entrepreneurs with direct online access to Arrow’s design tools, engineering experts, prototype services, manufacturing support and even supply chain management—a total package of benefits worth up to $500,000. Arrow will assess select Indiegogo campaigns for their technical feasibility, manufacturability and overall impact; Arrow-supported campaigns will be denoted on the Indiegogo site with a special Arrow badge.
“This is a completely new model of social funding, innovation and production in the technology and IoT space.”
The two companies formalized an alliance after Indiegogo entrepreneurs have increasingly turned to Arrow and the new Arrow.com to help transition innovative ideas into successful commercial products. Solar Roadways, the project to turn roads into renewable energy sources, launched on Indiegogo and raised more than $2.2 million in funding. With Arrow’s product support, the company is currently installing its first project in Idaho. JIBO, the world’s first social robot for home, raised over $3 million in funding on Indiegogo. With Arrow’s design engineering support and services, JIBO robots are currently making their way to homes across the globe.
Tomi Engdahl says:
The Pros and Cons of Crowdfunding
http://www.eetimes.com/author.asp?section_id=36&doc_id=1329746&
Crowdfunding brings some tangible benefits in addition to funding novel projects, but it must be managed carefully to achieve its goals.
First off, the concepts of crowdsourcing and crowdfunding are significantly different. Crowdsourcing is where the community is asked for money and/or help to design or create something, such as software; by comparison, crowdfunding is an open call for money in return for incentives, such as discounted product.
Lime Microsystems has defined the SDR product and brought it to the prototype stage. This has allowed lead customers and software engineers to explore the possibilities opened up by the hardware. Lime has also embraced an open source philosophy for years, and has built a following of software and hardware developers interested in exploring the many facets of wireless. This is now showing tangible benefits. As an example, Telcos can download an LTE stack onto a computer and plug in the LimeSDR to realize a fully functional small cell. Furthermore, because this is open source, it is also easier to integrate with Software Defined Networking software.
Crowdfunding “pros”
One advantage of crowdfunding is that backers of the campaign provide the funding to take the concept through to production status. In this case, funding mostly involves the costs of logistics, manufacturing liaison, and testing. The solution also avoids the company incurring ongoing finance charges, which would be the case for a conventional bank loan, and avoids the dilution of equity for an advance by a venture capitalist organization.
The significant benefit here is that early adopters are rewarded with the Lime product at a reduced price. This “pump priming” ensures that all parties in the manufacturing chain know that there will be genuine demand for the product, and so can plan accordingly.
I have been in marketing long enough to know that product definition is a vital stage in the process.
Crowdfunding “cons”
As with most things, there are also downsides to the crowdfunding scheme. Failure to meet the target funding within the selected time frame is clearly the biggest risk. The advice that I found in all my research is to set a realistic goal. This should be based on careful consideration of the minimum requirement coupled with your best estimate of what pledges can be expected (then add a percentage for contingencies). Typically, if the target is missed, then the campaign is closed and the pledges returned to the backers.
Setting up a crowdfunding campaign will involve the company committing time (and energy) to create the materials, including the text, diagrams, and video for the portal. It’s also necessary to sort out any legal aspects associated with this approach.
Not surprisingly, the moderating organization — Crowd Supply in this case — charges a fee for its services. This typically starts at five percent, which still leaves 95% for the company to complete its pledges. In return, the client benefits from the reach and expertise of the moderating organization, as well as the logistics of collecting the money.
A further possible risk comes from bad Public Relations following the release of a poor product.
Tomi Engdahl says:
Arrow-Indiegogo Announce Deal: Introduce Crowdfund-to-Production Platform
https://www.eeweb.com/news/arrow-indiegogo-announce-deal-introduce-crowdfund-to-production-platform
Indiegogo, the global platform for entrepreneurs to bring their ideas to life, and Arrow Electronics, the global technology company providing products and solutions that guide innovation forward, today forged a strategic alliance to create a groundbreaking new crowdfund-to-production platform aimed at accelerating the pace of innovation for technology and Internet of Things (IoT) entrepreneurs.
Tomi Engdahl says:
The SEC Has a Thing for Crowdfunding
http://hackaday.com/2016/05/25/sec-crowdfunding-thing/
Kickstarter is not a store. Indiegogo is not a store. No matter what crowdfunding platform you’re on, you’re not in a store. This is an undeniable truth, and no matter how angry you are about not being able to bring a cooler with a blender to the beach this summer, you did not buy this cool cooler, you were merely giving someone money to develop this cooler.
This reality may seem strange for the most vocal Internet commenters out there, leading them to the conclusion their pledge for a crowdfunding campaign was an investment.
Crowdfunding is not a store, and according to Kickstarter and Indiegogo, it is not an investment, either. Last week, the Securities and Exchange Commission’s rules for “crowdfunded investing”, “Regulation Crowdfunding”, or “Title III Crowdfunding” kicked into gear. Is this the beginning of slack-jawed gawkers throwing their life savings into a pit of despair filled with idiotic consumer products that violate the laws of physics?
Tomi Engdahl says:
How Did Pocket NC Survive and Thrive?
http://hackaday.com/2016/06/01/how-did-pocket-nc-survive-and-thrive/
When the Pocket NC 5-axis Tabletop CNC Mill KickStarter came out, I immediately chocked it up as a failure out of the gate. I figured that there would never be a single delivered unit. It just seemed too impossible. The price was too low for a machine with that many large machined aluminum pieces.
Pocket NC, however, made none of these mistakes. Matt and Michelle run the business as a husband and wife team. Neither of them are lightweights
The first step, and this is one many campaigns don’t get to before launch, was to complete the design. The device was thoroughly iterated until they had a real 5-Axis machine. Next came the important bit. They constructed a few Pocket NCs and timed every step. They knew how long it took to do the machining, wiring, testing and assembly down to the second. Using this information they further optimized the design and repeated the process. This method of iteration left them with not only a sound mechanical design, but a thorough understanding of the cost of their machine.
I remember finding it odd, when the campaign launched, that they had set a maximum on the amount of machines they would sell.
Michelle had carefully calculated the cost of each machine and the maximum amount of machines they could make with the capital on hand. Rather than falling victim to Lumen Labs downfall — finding themselves backed into a corner where they couldn’t escape without finding more capital, raising the price, outsourcing (which is always risky), and dropping quality — Pocket NC would be guaranteed capable of producing the machines estimated
business is good, they’ve survived where other’s haven’t
http://www.pocketnc.com/
Tomi Engdahl says:
Customers don’t care
In general, customers don’t care about how resourceful or nice or talented the product developers are. They want the product to look great, work great, and be cheap. You, the scrappy solo engineer, are competing against Goliaths with infinitely more resources, but when placed side by side on the retail shelf (if you’re lucky enough to be able to get there), the customer has no idea. They can see one looks more polished and cheaper, so they pick that one. They don’t know about cost structures and volume pricing, or development costs or tool amortization, or fixed certification costs. It’s a classic David and Goliath battle, except the crowd doesn’t see an underdog or a mismatched fight.
So, dear hacker, let me finish this winded toast by pointing out your advantages. You move fast; you identify a problem and build a solution faster than a big company knows that there’s even a market. You know your customers and form relationships with them, few as they are. You know the ins and outs of your business and can run a tight ship with little waste. You are passionate about your products and take great pride in what you’ve accomplished. You have the potential to get rich and famous. And you are welcome here any time with your sweet hacks.
Source: http://hackaday.com/2016/06/07/stay-scrappy-hackers/
Tomi Engdahl says:
Embedded entrepreneurs get a boost from Arrow and Indiegogo
http://www.edn.com/electronics-blogs/about-embedded/4442243/Embedded-entrepreneurs-get-a-boost-from-Arrow-and-Indiegogo?_mc=NL_EDN_EDT_EDN_funfriday_20160624&cid=NL_EDN_EDT_EDN_funfriday_20160624&elqTrackId=e2faaed9d41447849371ea7b64bd3393&elq=1bba0d66db7f4ceab7a5adebd0c2cf91&elqaid=32825&elqat=1&elqCampaignId=28665
There have been a lot of innovative ideas entering market tryouts through crowdfunding organizations like Kickstarter and Indiegogo. But as experienced embedded developers know, there is a large chasm between getting a prototype to work and manufacturing a cost-optimized finished product. Arrow and Indiegogo are teaming up to help bridge that gap for the small developer.
The advent of powerful microprocessors, standardized development platforms, and an ecosystem supporting small (or one-person) development efforts is changing the way embedded systems get created, by simplifying development. While the traditional, large-scale product development team is still the norm, there is increasing industry energy going into individual and small-team development. Such development efforts have been responsible for considerable innovation and experimentation in defining new products, and markets, and this is getting notice from some major players. From semiconductor vendors, to service providers, to electronics distributors, support is now growing for these individual efforts in hopes that when one of them strikes it big the developers will continue to work with the folks who helped get them started.
Tomi Engdahl says:
Embedded entrepreneurs get a boost from Arrow and Indiegogo
http://www.edn.com/electronics-blogs/about-embedded/4442243/Embedded-entrepreneurs-get-a-boost-from-Arrow-and-Indiegogo?_mc=NL_EDN_EDT_EDN_today_20160630&cid=NL_EDN_EDT_EDN_today_20160630&elqTrackId=43c47715242e453795dc081c142f7f70&elq=505ea0e4be9d42c5b47580089b06eb3c&elqaid=32898&elqat=1&elqCampaignId=28728
There have been a lot of innovative ideas entering market tryouts through crowdfunding organizations like Kickstarter and Indiegogo. But as experienced embedded developers know, there is a large chasm between getting a prototype to work and manufacturing a cost-optimized finished product. Arrow and Indiegogo are teaming up to help bridge that gap for the small developer.
The advent of powerful microprocessors, standardized development platforms, and an ecosystem supporting small (or one-person) development efforts is changing the way embedded systems get created, by simplifying development. While the traditional, large-scale product development team is still the norm, there is increasing industry energy going into individual and small-team development. Such development efforts have been responsible for considerable innovation and experimentation in defining new products, and markets, and this is getting notice from some major players. From semiconductor vendors, to service providers, to electronics distributors, support is now growing for these individual efforts in hopes that when one of them strikes it big the developers will continue to work with the folks who helped get them started.
The advent of crowdfunding organizations has likewise changed the industry.
But this manufacturing barrier is also coming down. Crowdfunder Indiegogo began addressing it with the introduction of its fulfillment support services. The services help crowdfunded entrepreneurs pair up with suitable marketing and production partners.
Now the obstacles confounding the transition from prototype to production are becoming even easier to scale with a new alliance between Arrow and Indiegogo. In this alliance, Arrow will assist select crowdfunded projects in bringing ideas to market by providing access to Arrow’s engineering and manufacturing expertise and to its production partners. Design tools, engineering experts, prototype services, and even supply chain management will be available to developers through online services.
This alliance represents a logical next step in the trend toward the democratization of electronics design and production. The advent of open source platforms – both hardware and software – that entrepreneurs could use to develop and prove their design ideas without needing extensive engineering expertise was the first step. Crowdfunding took the second step by making development capital available through public sources. Now, the Arrow and Indiegogo alliance is making productization, production, marketing, and even retail placement available to small-scale but innovative development teams.
Tomi Engdahl says:
Tech upstarts to pocket up to $5m from crowd-fund suckers, er backers
When I started out, all I had was just a dream … and millions in donations
http://www.theregister.co.uk/2016/07/06/washington_ups_silicon_valleys_allowance/
A pair of newly passed bills in the US Congress will increase the amount of money tech startups can raise to cover their early expenses.
The Fix Crowdfunding Act (HR 4855) and the Supporting America’s Investors Act (HR 4854) will raise the limits on money that companies can gather through crowdsourcing and venture capital channels.
Tomi Engdahl says:
Design for Hackers
http://hackaday.com/2016/07/27/design-for-hackers/
Near the end of the lifecycle of mass-market commercial product development, an engineering team may come in and make a design for manufacturability (DFM) pass. The goal is to make the device easy, cheap, and reliable to build and actually improve reliability at the same time. We hackers don’t usually take this last step, because when you’re producing just a couple of any given device, it hardly makes sense. But when you release an open-source hardware design to the world, if a lot of people re-build your widget, it might be worth it to consider DFM, or at least a hardware hacker’s version of DFM.
You want to make the assembly easy on them, but you don’t want to have to use through-hole components that are as big as your head and becoming more and more difficult to source all the time. What to do?
That’s not a rhetorical question. What should we do? I’m entirely happy soldering surface mount technology (SMT) down to 0805 and 0.5 mm pin-pitch with good illumination and a magnifying lens, but below that it gets tricky. People who use solder paste and reflow can handle even smaller parts. But if you require reflow skills to rebuild your project, you’re also limiting the potential audience to a small percentage of Hackaday readers, much less the entire human population.
Home etching is doable down to just about the same resolution as hand-soldering in my experience, but only with a bit of practice. Double-sided boards can be made to work at this scale with yet more practice. When your design gets complicated in these directions, you force the hacker to outsource the PCB fabrication. These days, that’s less and less of a problem, but depending on where people live it can introduce a delay even if it doesn’t add much extra cost to the project.
Tomi Engdahl says:
What It’s Like to Quit Your Job and Start a Company – Then Fail
http://hackaday.com/2016/07/25/what-its-like-to-quit-your-job-and-start-a-company-then-fail/
Entrepreneurial Spirit and The Hustle
Taking Action
Making Mistakes
Taking the Hint
Luckily, the fine folks here at Hackaday have welcomed me back as a contributor. I’ve got a long road ahead of me, with a pile of debt to start chipping away at, ruined credit to rebuild, and security to regain. But, I’ll tell you a secret: that entrepreneurial spirit hasn’t left me. I don’t regret trying to make this business happen. Sure, I wish I had gone about it differently, but I know I never would have been satisfied with not trying. I’ll almost certainly try again at some point.
If you’ve read this far, you probably have that same spirit, and that need to start something.
Tomi Engdahl says:
From Project To Kit: So You Want To Sell Electronic Kits
http://hackaday.com/2016/07/29/from-project-to-kit-so-you-want-to-sell-electronic-kits/
Many of us have enjoyed building electronic projects that come not from our own inspiration or ingenuity but from a ready-made kit. It makes sense, after all in buying a kit you should receive a tried-and-tested design that you can assemble without some of the heartache associated with getting a self-designed project right. And though in recent years the barriers to entry into the professional PCB market for small projects have lowered significantly, there is still an attraction to a kit that comes with a decent PCB and case.
From the point of having a nicely executed project to that of wondering whether it too could be sold as a kit is not a huge step. This is the first of a series of articles that will examine the kit manufacturing process from project to customer, and will with luck deliver some insight to those of you who have always wondered whether you could make it as a kit vendor.
Don’t Quit Your Day Job
The first thing to understand at this point is that there is a need for realistic expectations about your likely success. People will want to build your kit and it will bring in some money, but until you have built up a customer base and a range of kits with a lot of hard work, it won’t bring in much money. Enough to finance your future projects which you will then turn into fresh kits, enough to pay for tools and test equipment, but probably not enough in the medium term to enable you to give up your day job. That’s an achievable goal in the long term with sufficient effort, but not one you should expect to happen soon.
If you haven’t been disillusioned too much by the previous paragraph, how about the project you would like to turn into a kit? Have you done your market research, and do you know what will make it a kit people will want to build? The answers from the first question will tell you whether it’s worth proceeding with the idea, and those from the second will ensure that your customers tell their friends and come back for more.
What are Others Doing?
Taking an example from the real world, imagine yourself to have produced an educational LED board for the Raspberry Pi. If you take a look at that particular market, it will show you multiple similar offerings from different companies. These boards have the advantage of being very cheap to develop, but you would have to ask yourself whether it is worth entering such a crowded arena.
You will also have to pay close attention to the prices your competitors’ kits are selling for.
This detailed knowledge of your marketplace will help you decide whether your proposed kit fits a niche in both product sector and price that you can exploit. If the last few paragraphs have poured cold water on your dreams it’s worth remembering that bringing a small electronic kit to market is likely to cost you a high three-figure sum before you’ve sold a single kit, so it’s worth ensuring that your product has a chance of success before risking any of your hard-earned.
Tomi Engdahl says:
From Project To Kit: So You Want To Sell Electronic Kits
https://hackaday.com/2016/07/29/from-project-to-kit-so-you-want-to-sell-electronic-kits/
Many of us have enjoyed building electronic projects that come not from our own inspiration or ingenuity but from a ready-made kit. It makes sense, after all in buying a kit you should receive a tried-and-tested design that you can assemble without some of the heartache associated with getting a self-designed project right. And though in recent years the barriers to entry into the professional PCB market for small projects have lowered significantly, there is still an attraction to a kit that comes with a decent PCB and case.
From the point of having a nicely executed project to that of wondering whether it too could be sold as a kit is not a huge step. This is the first of a series of articles that will examine the kit manufacturing process from project to customer, and will with luck deliver some insight to those of you who have always wondered whether you could make it as a kit vendor.
From Project To Kit: Getting The Hardware Right
http://hackaday.com/2016/08/05/from-project-to-kit-getting-the-hardware-right/
In this article we will look at specifying and pricing the hardware side of a kit, illustrating in detail with an example project. The project we’ve chosen is a simple NE555 LED flasher which we haven’t built and have no intention of assembling into a kit for real, however it provides a handy reference project without the circuit itself having any special considerations which might distract from the job at hand.
Details, Details
Having made the decision that you have a potential product on your hands your next step is to turn it from a project into something a customer would be satisfied with. If you have not done so already, you should try to produce a prototype which will represent the product exactly as you will sell it. Given that you’ve already got it working as a project this might seem an odd thing to start with an an unnecessary repetition of effort, however the key point here is that you should use the exact components you would sell.
You should design a PCB and have a prototype run manufactured, and you should compile a detailed bill of materials complete with manufacturer or supplier part numbers which you should then order just as you would if you were assembling a batch of kits.
If you can build a couple of prototypes using these components and you are happy that you have made a working and repeatable kit, you should pack an example kit in the way you would send it to the customer. Include any sundries, for example folded sheets of paper to represent kit instructions, and a sticky label for the kit packaging.
At this point you will have to consider the fragility of your components, as well as how you are going to send them to the customer. Consider for example whether you will need to provide a holder for any DIP ICs. Even go as far as to pack up a sample order in a padded envelope and weigh it to see which postal price bracket it fits in. You are likely to sell these kits internationally, so a few grams either way can make a significant difference to your postage costs.
Pricing
Once you are happy with your kit packaging, take your sample kit and itemise everything included in it. Not simply the electronic components, but the packaging, the stickers, the instructions and other sundries. Make a spreadsheet and use it to compute prices for all these constituent parts for a range of production run sizes. For a first kit it might be worth pricing up runs of 25, 50, and 100. Research suppliers and price breaks, and don’t forget to include any sales taxes if applicable as well as customs charges on anything you may have to import. This last point is particularly important if you are having a PCB made in China, for example.
we can see that when the kit packaging is taken into consideration, a small run of LED flasher kits will cost us just under 3 pounds each. If we were making these kits for real or in a larger volume this figure would be likely to drop significantly
It’s a decision you’ll have to make, how many of an unproven kit to produce, as a mountain of unsold kits can represent a significant amount of tied-up investment.
Twenty five kits often seems about right from this perspective, if it sells unexpectedly quickly you can always run up a load more.
Once you have an accurate view of how much your kits will cost to produce, you can think about the price at which they can retail. You should know what other manufacturers charge for kits of similar size
you have to recognise that producing and packing the kit is in itself a significant amount of work for which the customer should be prepared to pay. You will always find a customer with a calculator who complains that they have just paid over £5 for £2.50-worth of components, however of course they are not just paying for the components but the development work that has gone into making a satisfactory kit experience.
its commercial success will hang on the instructions you ship with it.
Tomi Engdahl says:
Lessons in Small Scale Manufacturing From The Othermill Shop Floor
http://hackaday.com/2016/08/10/lessons-in-small-scale-manufacturing-from-the-othermill-shop-floor/
Othermachine Co. is not a big company. Their flagship product, the Othermill, is made in small, careful batches. As we’ve seen with other small hardware companies, the manufacturing process can make or break the company. While we toured their factory in Berkeley California, a few interesting things stood out to us about their process which showed their manufacturing competence.
It’s not often that small companies share the secrets of their shop floor. Many of us have dreams of selling kits, so any lessons that can be learned from those who have come before is valuable. The goal of any manufacturing process optimization is to reduce cost while simultaneously maintaining or increasing quality. Despite what cynics would like to believe, this is often entirely possible and often embarrassingly easy to accomplish.
Lean manufacturing defines seven wastes that can be optimized out of a process.
The first thing that stuck out to me upon entering Othermachine Co’s shop floor is their meticulous system for getting small batches through the factory in a timely manner.
One way to ensure that parts are properly handled and inventory is kept to a minimum is with proper visual controls.
It’s hard to define what’s over processing and what isn’t.
With the proper management of waste it is entirely possible to save money and improve a process at the same time. It takes a bit of training to learn how to see it.
Tomi Engdahl says:
Hackaday Prize Entry: A Good Electronics Learning Toolkit
http://hackaday.com/2016/08/12/hackaday-prize-entry-a-good-electronics-learning-toolkit/
Tomi Engdahl says:
From Project To Kit: Instructions Are Everything
http://hackaday.com/2016/08/12/from-project-to-kit-instructions-are-everything/
Keep it Simple
It is important to remember that the reader will never have seen the kit before and will not have your level of expertise on its operation, so you should pitch them as though at a relative novice. Imagine that a not-very-technical person is about to build your kit, and try to provide enough information for them to proceed without losing their way. This may at times seem as though you are pitching it at an impossibly low level, but your more tech-savvy customers will understand and take away only what they require.
Test and Review
Once you have written your instructions, you’ll have to ensure the quality of your work. Ask your friends to proofread them, and if you can give a sample kit to one of them with the instructions to follow as they build the kit. Be prepared to incorporate responses to any criticism, imagine that the proofreaders represent real customers.
Having honed the document, it is important that you then present it in as good a way as possible. Print on good quality paper with a colour laser printer, and use double-sided printing if you can. They are as important to the kit as any of the components, so they should be treated accordingly.
Tomi Engdahl says:
magicShifter 3000: An Over-Engineered POV Stick with a 15-Year Journey
http://hackaday.com/2016/08/22/magicshifter-3000-an-over-engineered-pov-stick-has-come-a-long-way/
3 hackers, 16 LEDs, 15 years of development, one goal: A persistence of vision display stick that fits into your pocket. That’s the magicShifter 3000. When waved, the little, 10 cm (4 inches) long handheld device draws stable images in midair using the persistence of vision effect. Now, the project has reached another milestone: production.
The design has evolved since it started with a green LED bargraph around 2002. The current version features 16 APA102 (aka DotStar) RGB LEDs, an ESP-12E WiFi module, an NXP accelerometer/magnetometer, the mandatory Silabs USB interface, as well as a LiPo battery and charger with an impressive portion of power management.
After experimenting with Seeedstudio for their previous prototypes, the team manufactured 500 units in Bulgaria. Their project took them on a roundtrip through hardware manufacturing.
Over all the years, the magicShifter has earned fame and funding as the over-engineered open hardware pocket POV stick.
https://hackaday.io/project/9668-magicshifter-3000
Tomi Engdahl says:
Linux Turns 25, Is Bigger and More Professional Than Ever
https://linux.slashdot.org/story/16/08/22/182242/linux-turns-25-is-bigger-and-more-professional-than-ever
The Linux operating system kernel is 25 years old this month, ArsTechnica writes. It was August 25, 1991 when Linus Torvalds posted his famous message announcing the project, claiming that Linux was “just a hobby, won’t be big and professional like gnu.
Linux turns 25, is bigger and more professional than ever
Just 7.7% of devs are unpaid—because Linux development is worth paying for.
http://arstechnica.com/information-technology/2016/08/on-linuxs-25th-anniversary-development-has-gone-corporate/
Tomi Engdahl says:
From Project To Kit: The Final Furlong
http://hackaday.com/2016/08/26/from-project-to-kit-the-final-furlong/
This article is the fifth in a series looking at the process of bringing an electronic kit to market from a personal project. We’ve looked at market research, we’ve discussed making a product from your project and writing the best instructions possible before stuffing your first kits ready for sale. In this article we’ll tackle the different means of putting your kits out there for sale.
Given a box of ready-to-sell kits, what next? You have to find some means of selling them, getting them in front of your customer, making the sale, sending them to the purchaser, and safely collecting their money. A few years ago this was an expensive and risky process involving adverts in print magazines and a lot of waiting, but we are fortunate. The Internet has delivered us all the tools we need to market and sell a product like an electronic kit, and in a way that needn’t cost a fortune. We’ll now run through a few of those options for selling your kits, before looking at shipping, marketing, and post-sales support in the final article in the series.
You might say that both the easiest and hardest way to sell kits is to do it in person, face to face.
One of the simplest ways to sell your kit products online comes through Hackaday’s sister company here in the Supplyframe family, Tindie. It’s an online marketplace for maker products with a focus on electronics
If a service like Tindie doesn’t enthuse you, you might next consider an online shop of your own. This is the most flexible way to present your products online, but also one that is fraught with risks and can be very hard work.
If a service like Tindie doesn’t enthuse you, you might next consider an online shop of your own. This is the most flexible way to present your products online, but also one that is fraught with risks and can be very hard work.
In a way a surprisingly good outcome from a crowdfunding campaign is for it to fail. If your campaign fails you have lost no money, but you have learned a lot about your market and gained a huge amount of exposure without having to deal with an overwhelming order fulfilment problem. A lot of your backers will come and buy your product anyway when you launch it through one of the methods in the previous paragraphs.
In the final article we’ll think about what happens once you’ve made the sale; how you ship them to your customers, and how you support those customers once they’ve received their kits..
Tomi Engdahl says:
Zach Fredin: Take Your Hardware Idea Through Pilot-Scale Production
https://www.youtube.com/watch?v=kTfieGjMSUg
Zach Freeding is helping to teach about how the nervous system works through a set of electronic nodes he designed. They connect together in different ways, mimicking neurons and teaching about their function in a less-abstract way. The project, NeuroBytes, was a finalist for Best Product in the 2015 Hackaday Prize. Zach gave a talk on the process of going from prototype to 100-unit production at the 2015 Hackaday SuperConference. Since then Zach’s company, NeuroTinker, received news that the project has been recommended for an NSF grant.
Tomi Engdahl says:
From Project To Kit: After The Sale
http://hackaday.com/2016/09/02/from-project-to-kit-after-the-sale/
However you sell your kits online, you’ll have to find a means of shipping them to the customer. For an online operation this unseen part of the offering is more important than any other when it comes to customer satisfaction, yet so many large players get it so wrong.
This is the final article in a series looking on the process of creating and selling a commercial kit from a personal electronic project (read all the posts in this series). We’ve looked at the market, assembling the kit and its instructions, and how to set up an online sales channel. In this part we’ll look at what happens when you’ve made the sale, how to get it safely to the customer and how to keep the customer happy after the sale by offering support for your products. We’ll also give a nod to marketing your site, ensuring a fresh supply of customers.
As a small supplier it is crucial that your customers come away satisfied and receive their kits, because a non-delivery costs you more proportionally than it does one of the big boys. Pick a courier not on price but on service, and make sure you allow enough margin for that in your shipping costs.
Make it a selling point that you use a tracked and signed for courier, and you will gain some customers by that alone. Often Royal Mail, USPS, Canada Post or whatever the equivalent is in your part of the world makes the best choice
The same local bulk packaging supplier you would have used earlier for your kit packaging should be able to help you with mail packaging for a much better price than you would pay from a retail source.
For a small kit in a plastic bag like our 555 LED flasher a mid-range padded envelope is fine, even when wrapped in an invoice for mailing it’s not heavy or sharp so it won’t either puncture the envelope or damage the kit.
When you have an order ready to go, ensure you have all the steps in packing an order written down as a checklist. Capture the payment, print an invoice on label stationery, print another for the file, gather the kits, check and pack the kits, stick the label on the envelope, fold the invoice and pack it in the envelope, do a final check of everything and then seal the envelope. It might seem odd to have such an obvious list, but it’s amazing how easy it is to forget something
Now to Become a Marketing Genius
Of course, thinking that merely having an online shop will guarantee you sales is likely to disappoint you. That’s such a 1998 business model! Your customers will have to find you somehow, and you are going to have to become a marketing genius to get it in front of them. Fortunately in this endeavour you have an advantage. If you are the kind of person who is a Hackaday reader then chances are you are part of the same community as your customers, so your social networks are also their social networks.
Become an active and useful person to know on the relevant forums, Twitter, and Facebook groups.
Share the interesting and relevant parts of your work — interesting manufacturing practices, neat new parts, test rigs, packaging/shipping successes and fails that show you’ve worked it out, and the awesome things you’re doing with the kit.
Keep at it and slowly word will get around that you have these kits for sale, and you’ll get a few orders.
Support Your Community
Once you have sent out your kits to customers, the tracking service tells you they have been delivered, and then… nothing. You have to assume that the customers you never hear from have happily built your kits and everything went well. Congratulations, all that work with the instructions paid off. Even the people who have problems will be more likely to come back to you with questions than to give you grief, and when that happens you should have a support strategy in the wings.
If you have a reliable channel through which you can be contacted for support (maybe a Google group, Facebook group or similar) and you answer all support queries courteously and as factually as you can, then you should in time pick up a reputation for delivering a good service when things go wrong.
Tomi Engdahl says:
Life On Contract: Estimating Project Time
http://hackaday.com/2016/09/09/life-on-contract-estimating-project-time/
“How long will it take you to do this?” the manager asks.
“A couple of days maybe?” You reply in turn. The manager nods and you take your escape. Little do you know that you have failed.
The project swerves out of control. Two days on the dot the manager is there expecting results. How? How did this happen again? It felt right! Two days is all you’d need to do such a simple project. It ended up taking a week.
The next meeting you say two weeks just to be sure. Everyone nods gravely, upset that something would take so long, but the work must be done. Two days later you sheepishly wander into the manager’s office with a completed project. He looks pleased but confused.
I learned a lot from them and I ended up distilling it down into a few rules.
1. There Is No Other Unit Than Hours
2. Be honest.
3. Get Granular.
4. Promise a Range. Give a Deadline.
When working on a contract job it often feels like sticking a foot in a trap when a time estimate is given. Are they going to hold me to this? What if it goes wrong? After all, we are not fortune tellers. Unless the manager is extremely bad or you show yourself to be extremely lax in your duties, it is unlikely that a time estimate will be used against you.
At the end of the day the manager needs a time estimate because he needs to know when to move people and he needs to manage costs.
Most importantly a time estimate is there to protect you. It’s likely that you have been asked to do a task because you are an expert. You’ve done this before. You know how long it’s going to take. There is no way that you can explain to your boss all the intricacies of your particular task. Nor is there any need to burden them with that information. If a proper time estimate is given and you are known to be a person who delivers within the range promised then it is rare that you will ever be questioned in a hostile way about your progress.
Tomi Engdahl says:
Books You Should Read: Poorly Made In China
http://hackaday.com/2016/09/09/books-you-should-read-poorly-made-in-china/
This book is scary, and honestly I can’t decide if I should recommend it or not. It’s not a guide, it doesn’t offer solutions, and it’s full of so many cautionary tales and descriptions of tricks and scams that you will wonder how any business gets done in China at all. If you are looking for a reason not to manufacture in China, then this is the book for you.
No Free Lunch
The gist is this, though: China isn’t as cheap as it sounds, and at every possible chance the manufacturer will do whatever they can to turn a greater profit. This involves raising the prices to the importer at the last minute, cutting corners incessantly, making unilateral decisions on changes to the product, lying about their capabilities and connections, selling extra or rejected product to other markets, and all while not being able to be held accountable or responsible for problems, putting all the cost and risk on the importer. The picture the author paints is of a country of con-men.
If you want to skip the book, the thing you should take away from it is that everyone is trying to make money, and if you are hiring someone to make something for you, you need to accept that they will turn a profit from that.
Tomi Engdahl says:
An Xiao Mina / Fusion:
How online platforms such as WeChat, Jindong, and Alibaba’s eBay-like Taobao have boosted Shenzhen’s already-thriving hardware startup ecosystem
‘Created’ in China: Shenzhen is making hardware like Silicon Valley makes apps
http://fusion.net/story/338939/created-in-china-shenzhen-hardware-startups/
Based in Shenzhen, China, Gao lives and works near the city’s Huaqiangbei electronics neighborhood. Centered in the world’s largest and increasingly most famous manufacturing environment for hardware, Huaqiangbei is likely where the selfie stick and the hoverboard saw some of their early buyers. A visit to the market now offers a peek at future tech crazes of 2017: karaoke mics that plug into apps that rate your singing voice, computers the size of a USB stick, solar panels that suction cup to your window, and mini robot friends.
But Huaqiangbei is just one entry point for hardware. Often, new ideas see life online before ever entering physical stalls. Thanks to the networking potential of the internet, the physical products being made in Shenzhen are now starting to go viral on the web in the same way that Silicon Valley apps and popular YouTube videos do. In China, we’re seeing the rise of what a recent McKinsey report called wired companies: ones that use the internet in key aspects of their business. Connectivity helps them manage supply chains, access more diverse sources of financing, and reach an array of consumers.
Production culture here points at a world of networked manufacturing, as physical objects become as internetworked as our digital ones. Already, makers can develop and ship hardware products almost as quickly as they can develop and ship ideas. And this time frame is expected to shorten dramatically in coming years.
China is amidst a massive transition from a country primarily of manufacturers to one of makers. Lei Gao is part of this new generation that uses the internet’s agility to augment what the city has to offer. Within days, he had what he needed to experiment with his idea.
Gao and his team make up Imlab, one startup amongst over a million small and medium-sized companies in Shenzhen. Hardware startups across the city can readily pull together a working prototype in a day, test it, and quickly figure out where to go next.
“Since its inception, Shenzhen was a site of experimentation,” says Silvia Lindtner, an assistant professor at the University of Michigan’s School of Information who has been studying China’s maker scene and community since 2010. “Shenzhen is place that’s open and different from other places in China.”
As with much of the country, the government has played a key role in making Shenzhen what it is today. During the economic reforms under Deng Xiaoping, China established the city as the country’s first Special Economic Zone in 1980. As people moved there seeking economic opportunity, the small Hakka fishing village across the border from Hong Kong transformed rapidly.
Shenzhen has the geographical footprint of Los Angeles, but a population three times its size at 12 million people.
Tomi Engdahl says:
Seriously, we don’t need smartphone-controlled candles
https://techcrunch.com/2016/09/20/why-why-why-headdesk/
You don’t have to spend a long time in tech journalism before you get pitched a whole stack of companies that make you scratch your head and ask yourself “why?”
LuDela is but one example. The company makes a smartphone-controllable candle featuring real, actual fire. Why? There are plenty of real problems to solve; creating fire at the touch of an app isn’t among them.
As someone who covers a lot of Kickstarter and Indiegogo campaigns, I get an above-average number of emails trying to pitch me on some truly asinine ideas. I’ve seen Bluetooth-controlled shoe organizers.
A small part of me loves these pitches. The creativity is incredible. The chutzpah is admirable. The amount of time and money invested in their pet projects is balls-to-the-wall hard-core. A much bigger part of me doesn’t love these pitches.
Before you start your next venture, consider the opportunity cost of starting that venture.
A startup will take years of hard work, inhuman amounts of dedication and will come with a very real personal cost. Startups are stressful, bad for your physical and mental health and often bad for your existing and new interpersonal relationships.
Unnecessary, but probably extremely successful
“We’re the creators of the world’s first and only real-flame candle you can light and extinguish from your smartphone,” writes the company’s co-founder and CEO.
https://ludela.com/
Tomi Engdahl says:
Preparing Your Product For The FCC
http://hackaday.com/2016/09/19/preparing-your-product-for-the-fcc/
At some point you’ve decided that you’re going to sell your wireless product (or any product with a clock that operates above 8kHz) in the United States. Good luck! You’re going to have to go through the FCC to get listed on the FCC OET EAS (Office of Engineering and Technology, Equipment Authorization System). Well… maybe.
As with everything FCC related, it’s very complicated, there are TLAs and confusing terms everywhere, and it will take you a lot longer than you’d like to figure out what it means for you.
There are two kinds of things that are getting tested; intentional radiators and unintentional radiators. Intentional means they are purposely putting out RF signals, like WiFi, Bluetooth, or any other transmitting radio. These must be tested and filed with the FCC before you can start selling or even marketing your product.
Then there are unintentional radiators. This could be switching noise from a power supply, accidental antennas from poor ground pours, or long clock traces. You need to have your product tested for unintentional radiation
There’s another thing to consider, and that’s FCC Modular Approval. If you want to avoid all the hassle and expense of intentional emission testing, you can use a wireless module that has modular approval. There are lots of companies that make these modules for BLE, WiFi, Zigbee, GSM, and pretty much any wireless tech. They go through the painful FCC process for you and sell you their module, which has the chip, balun, antenna, crystal, and shield, all in a pretty package that you can solder onto your PCB. This will avoid the intentional emissions testing and give you an optimized transmitter. You’re still responsible for unintentional radiation on your full board, but this is much cheaper and easier and may not even need to be filed.
For low volumes of products, modules are a great way to jumpstart product development and start scaling up, and when you have proven the market and the economics make sense to switch (usually in the tens of thousands in volume), then you can go to your own design.
Tomi Engdahl says:
Creating A PCB In Everything: Eagle DRC and Gerber Files
http://hackaday.com/2016/09/29/creating-a-pcb-in-everything-eagle-drc-and-gerber-files/
This time around I’ll be going over Design Rule Check (DRC) — or making sure your board house can actually fabricate what you’ve designed. I’ll also be covering the creation of Gerber files (so you can get the PCB fabbed anywhere you want), and putting real art into the silkscreen and soldermask layers of your boards.
Tomi Engdahl says:
Taking a U2F Hardware Key from Design to Production
http://hackaday.com/2016/09/29/taking-a-u2f-hardware-key-from-design-to-production/
Building a circuit from prototyping to printed circuit board assembly is within the reach of pretty much anyone with the will to get the job done. If that turns out to be something that everyone else wants, though, the job gets suddenly much more complex. This is what happened to [Conor], who started with an idea to create two-factor authentication tokens and ended up manufacturing an selling them on Amazon. He documented his trials and tribulations along the way, it’s both an interesting and perhaps cautionary tale.
[Conor]’s tokens themselves are interesting in their simplicity: they use an Atmel ATECC508A specifically designed for P-256 signatures and keys, a the cheapest USB-enabled microcontroller he could find: a Silicon Labs EFM8UB1. His original idea was to solder all of the tokens over the course of one night, which is of course overly optimistic. Instead, he had the tokens fabricated and assembled before being shipped to him for programming.
Designing and Producing 2FA tokens to Sell on Amazon
https://conorpp.com/2016/09/23/designing-and-producing-2fa-tokens-to-sell-on-amazon/
I made a two factor authentication token and have made it available on Amazon. In this post I’ll talk about the design, how I produced it affordably, and some metrics about selling on Amazon. If you’re interested in doing something similar, you can copy everything as it’s all open source.
It uses the U2F protocol, which is a standard developed by the FIDO Alliance and Google. U2F uses challenge response for authentication and is based on the P-256 NIST Elliptic Curve. FIDO additionally provides U2F standards for transports like USB, Bluetooth, and NFC which makes a project like this ideal.
Tomi Engdahl says:
DOUBLE TROUBLE
Your brilliant Kickstarter idea could be on sale in China before you’ve even finished funding it
http://qz.com/771727/chinas-factories-in-shenzhen-can-copy-products-at-breakneck-speed-and-its-time-for-the-rest-of-the-world-to-get-over-it/
Yekutiel Sherman couldn’t believe his eyes.
The Israeli entrepreneur had spent one year designing the product that would make him rich—a smartphone case that unfolds into a selfie stick. He had drawn up prototypes, secured some minimal funds from his family, and launched a crowdfunding campaign. He even shot a professional promo video, showing a couple taking the perfect selfie in front of the Eiffel Tower.
But one week after his product hit Kickstarter in December 2015, Sherman was shocked to see it for sale on AliExpress—Alibaba’s English-language wholesale site. Vendors across China were selling identical smartphone case selfie-sticks, using the same design Sherman came up with himself. Some of them were selling for as low as $10 a piece, well below Sherman’s expected retail price of £39 ($47.41). Amazingly, some of these vendors stole the name of Sherman’s product—Stikbox
Sherman had become a victim of China’s lightning-fast copycats. Before he had even found a factory to make his new product, manufacturers in China had spied his idea online, and beaten him to the punch. When his Kickstarter backers caught on, they were furious. “You are charging double the price for what the copycats are charging, yet I seriously doubt the final product will be any better than the copycats,” one person commented.
STIKBOX – the first selfie stick case for iPhone and Samsung
https://www.kickstarter.com/projects/634593202/stikbox-the-first-selfie-stick-case-for-iphone
Tomi Engdahl says:
Should You Outsource Manufacturing? A Handy Guide
http://hackaday.com/2016/10/24/should-you-outsource-manufacturing-a-handy-guide/
A lot of people assume that the product development cycle involves R&D, outsourcing to a Chinese manufacturer, and then selling the finished product. It’s almost ingrained in our heads that once a prototype has been developed, the next step involves a visa and airplane tickets. Here is a guide that will explore a few other options, and why outsourcing may not be appropriate for everyone.
First, let’s talk about goals. We’ll assume you’re not a large company, and that you don’t have a huge budget, and that you’re just getting started with your product and don’t have big volumes; a startup trying to sell a kit or breakout board, or a consumer electronics product. Your goals are the following:
1. Validate your product in the market. Build a minimum viable product and get it in the hands of lots of users
2. Get the most bang for your limited bucks. All money should go towards getting products out the door
3. Reduce risk to your company so that any single failure doesn’t crater the whole operation and you can safely grow.
With that in mind, what are your options?
Foreign Outsourcing
Some people will say that you should start in China early because you will have access to assembly methods and components that can be used in the design process to ensure that the final product will be assemble-able and components easily sourced when manufacturing does take place, as well as forging a relationship with the factories that will make the product. No.
It is my firm opinion that outsourcing to China (or other countries where manufacturing is stereotypically cheap) is only appropriate if:
1 You are dealing in large volumes and your current manufacturing strategy cannot handle it
2. You have been manufacturing a while and are looking to shave some of the COGS
3. You have been manufacturing a while and have ironed out many of the assembly kinks, the test jigs, the molds, and the product has all the features the customer wants.
It is likely that you will start in small volumes, on the order of hundreds, maybe even a few thousand. Assembly lines take a long time to set up. Travel to a foreign country is time-consuming and expensive. There are many hidden overhead costs that are essentially the same whether you are dealing in small volumes or large. But with small volumes, those costs don’t amortize well into the volumes
You may be able to get components cheaper, and you may be able to get labor on the assembly line cheaper, but that’s about it when it comes to cost savings
Although shipping by sea right now is super cheap, if you are in a hurry to get product, then air shipping is still and will likely always be expensive.
New products have kinks. They may have certain components that are particularly difficult to attach, or require some skilled labor to assemble. Consistency is challenging, and rework is normal. It is during those first few rounds of assembly that it is crucial to have the designers participate, working on building jigs to aid in assembly
The Big Picture of Foreign Outsourcing
Look at the Pebble smartwatch, or the Coolest Cooler. These are projects that were so successful that they had to outsource production. Their volumes were too high to manufacture at home, but that meant that they had to skip the important step of manufacturing locally and ironing out the kinks. If you see where they struggled (or failed entirely), it is largely because they outsourced manufacturing their product too early and quality, cost, and timeline all suffered in the long run because of it.
Local Outsourcing
You probably have a manufacturer capable of handling your product within 100 miles. It might be a few different manufacturers; a plastics company, a PCBA company, a packaging company, and a fulfillment company. Check them out.
Yes, they will be more expensive than you’d like. But they’ll help you along the way, often with free and extremely useful advice.
They’re going to do that because they want high yield and no returns or scrapped product,
Manufacturing Yourself
This is likely more accessible than you think. We recently finished a series on doing PCBA using home-made tools, and in volumes up to a few thousand boards per month, it’s a reasonable possibility. Sure, there are limitations, so BGA and double sided boards are more challenging, but for most applications, it’s not far-fetched.
Remember your 3 goals as a startup: get an MVP, spend every dollar on getting product out the door and servicing customers, and reduce risk as much as possible.
Tomi Engdahl says:
Crowdfunding: Oh Great, Now Anyone Can Invest In An Indiegogo Campaign
http://hackaday.com/2016/11/16/crowdfunding-oh-great-now-anyone-can-invest-in-an-indiegogo-campaign/
Crowdfunding site Indiegogo has partnered with equity crowdfunding startup Microventures to allow anyone to invest in startups.
https://equity.indiegogo.com/
Tomi Engdahl says:
A Tale of Electronic Manufacturing
http://hackaday.com/2016/11/25/a-tale-of-electronic-manufacturing/
What does it take to go from concept to dropping a finished product into the hands of the end user? Gather ’round for a story that pulls people and parts from around the world to make one killer piece of hardware art.
Hosting a conference about hardware creation presents an excellent opportunity to build a hardware badge. But the bar is set pretty high — everyone looking at it will notice all the telltale signs of design choice, component selection, and manufacturing process. Luckily we had a great team working on the Hackaday SuperConference Badge and it turned out magnificently. Let’s look at what it took to get there.
Concept, Design, and Prototype
Hardware is Hard
It’s pretty amazing that this came together, and the tale of manufacturing wouldn’t be complete without looking at some of the ways we tilted the scale in our favor.
We set out with a BOM cost goal of $20 including assembly. There are many ways to bend the numbers but a reasonable fence-sitting estimate is that we overshot that by around 20%. But that number doesn’t include some of the costs which we didn’t have to directly pay: the cost of the hardware design, a project manager, and final assembly and testing are not included. Also, Small Batch Assembly gave us the “Friends of Hackaday” rate which we were very happy to get. And our friends at Microchip, Garrett Scott specifically, threw in their time and talent to upgrade our bootloader to work as a USB mass storage device.
These extra costs that aren’t included in the bottom line but they all tied in to make this project magic. Most conferences don’t have the latitude to take on something this risky
Tomi Engdahl says:
[Prusa]’s business is doing great. This year, he released the Prusa i3 Mk. 2, a four color upgrade to the printer, and sales are through the roof. There’s just one problem: Paypal just locked his funds. Prusa is turning away from Paypal and given Paypal’s history, this will eventually be worked out. Be warned, thou
Source: http://hackaday.com/2016/11/27/hackaday-links-november-27-2016/
More: https://twitter.com/josefprusa/status/801823883057893381
Tomi Engdahl says:
PCB manufacturing requires global consistency
http://www.edn.com/electronics-blogs/supply-chain-reaction/4443067/PCB-manufacturing-requires-global-consistency?_mc=NL_EDN_EDT_pcbdesigncenter_20161128&cid=NL_EDN_EDT_pcbdesigncenter_20161128&elqTrackId=3f3f8a64f13d4fcc9b121dc6b3322180&elq=9a4e193c23ba431fb5a7beedf5f17d67&elqaid=34941&elqat=1&elqCampaignId=30505
As an industry, those of us involved in designing and manufacturing electronic products can all agree that we now live and operate in a global supply chain environment. Since a lot of what is incorporated into current and next generation products is reflected in the software, this isn’t much of a concern. Take your favorite products, download the latest software update and newly developed apps and you’re ready to go.
When it comes to developing the pieces of hardware, the process is not so simple. And, when it comes to printed circuit board (PCB) development efforts, the process becomes even more challenging. That’s because PCBs are the launching points for hardware product development and the laminate and prepreg materials used in designing and manufacturing PCBs are the nuclei for those boards.
The global aspects of the PCB development process are pretty much carved in stone—design and prototype the product in the U.S. and then move volume production offshore. The challenge lies in ensuring that the laminates and prepregs used for US prototyping efforts will be the same as those used in offshore volume production.
When electronic products were not nearly as complex as they are now laminate and prepreg selection was not that big of a deal. Almost everything could be done using some iteration of FR-4 class material. Products were forgiving enough that using an FR-4 class material for the U.S. prototyping effort and then moving to a similar but not identical iteration of it for off-shore volume production was o.k. Specifically, it was, and often still is, the practice of off-shore volume manufacturers to substitute the materials that are called out on the stackup drawings provided as guidelines for PCB fabrication. In fact, in some instances, product development companies have welcomed the opportunity to save money wherever or however they can and having offshore fabricators switch to a lower-cost, similar but not necessarily totally equivalent material is one path to realizing these savings.
Tomi Engdahl says:
Life on Contract: How to Fail at Contracting Regardless of Skill
http://hackaday.com/2016/11/29/life-on-contract-ways-to-fail-regardless-of-skill/
I believe higher quality learning happens from sharing failure than from sharing stories of success. If you have set your mind to living on contract, I present this cheat sheet of some of the most simple and effective ways to muck it all up that have surprisingly little or nothing to do with your technical skill, knowledge, or even deliverables.
Tomi Engdahl says:
Akiba: Shenzhen in 30 Minutes
http://hackaday.com/2016/12/07/akiba-shenzhen-in-30-minutes/
When [Akiba] is in Shenzhen, he picks up all the same commodity parts that you would, because they’re just so cheap. And Hua Qiang Bei is its epicenter: it’s a gigantic market for components, and they’re all being sold at rock-bottom prices.
The market for customized products lies somewhere between doing a ground-up design and buying already finished goods.
Prototyping
The prototyping resources available in Shenzhen are amazing: nobody bothers owning their own laser cutter because you can just walk down the street and get it done on someone else’s on the cheap. The same goes for 3D printing, fiberglass molding, and of course PCBs. If you’re sitting there with a PCB and parts in your hand, there’s no reason to pick up a soldering iron yourself either. There are assembly houses that will put together five fairly complicated boards for you for around $30 per board, with 24-hour turnaround!
Tomi Engdahl says:
Farhad Manjoo / New York Times:
Gadget companies like Pebble, Jawbone, and Nest are struggling as budget manufactures in Asia undercut prices and smartphones dominate most people’s lives
The Gadget Apocalypse Is Upon Us
http://www.nytimes.com/2016/12/07/technology/personaltech/the-gadget-apocalypse-is-upon-us.html?_r=0
Remember gadgets?
They were little electronic things that did stuff for you. They would play music or record videos or give you directions or let you play games on the go. They were fun. Everyone had them. Everyone wanted them. There were whole magazines and websites and even TV shows devoted to them.
For 30 or 40 years, through recessions and war, through stability and revolutions, they were always there, one gadget after another, from transistor radios to TRS-80s to Walkmen and Gameboys, then iPods and Flips, GoPros and Fitbits. We were sure gadgets would always be with us, because they had always been with us, and it was good.
But no. Winter is coming for gadgets. Or maybe winter has already come for gadgets. Everywhere you look, these days, gadgets seem on the rocks. Pebble, which makes smartwatches, has been purchased by Fitbit, which has had its own problems. GoPro may be going bust, while Jawbone, Nest and other members of the gentry of gadget pageantry look just about ready to stick a fork into.
What happened to gadgets? It’s a fascinating story about tech progress, international manufacturing and shifting consumer preferences, and it all ends in a sad punch line: Great gadget companies are now having a harder time than ever getting off the ground. The gadget age is over — and even if that’s a kind of progress, because software now fills many of our needs, the great gadgetapocalypse is bound to make the tech world, and your life, a little less fun.
Things were never easy for gadgets. The lives of gadgets have always been nasty, brutish and short.
Must Have of the Year, and the next year it would be old news.
Then things got even worse. Suddenly, out of nowhere, the Thing That Does Everything emerged from Cupertino, Calif. That was almost 10 years ago now. You know what I’m talking about: the iPhone.
For a while, it even looked as if we would have a gadget renaissance. “Gadgets are back,” said The Verge. People created websites where customers would pay to get gadgets that hadn’t even been made yet. They called it Kickstarter. You want a gadget? Pay for someone to make it! What a world.
People started making gadgets that you could wear. They started making gadgets for your house, gadgets to control your heating and cooling, gadgets to help you sleep. Imagine that! A gadget, for when you weren’t even awake. What a world. There were even gadgets that would make other gadgets. And that’s not even getting to the gadgets that could fly!
But now the companies making flying gadgets are crashing back to earth.
The gadgets that make other gadgets aren’t making other gadgets anymore, either: MakerBot, a much-buzzed-about start-up that aimed to spark a 3D-consumer revolution, failed spectacularly to get people printing at home.
The gadgets that were Kickstarted have been Kickstopped, too. Pebble, whose first smartwatch earned a record amount on the crowdfunding site, failed to find long-term success in a category that would soon be overrun by big companies like Apple and Samsung.
Much of this isn’t a surprise. “Hardware is hard” is an actual phrase that people in Silicon Valley say to pass for wise. What they mean is, starting a company that makes physical stuff has always been more perilous than starting a company that just makes code.
For start-ups, even in these days of easy contract manufacturing in China, gadgets involve a lot of costs — you need money for parts and a factory, and shipping and distribution, and you need virtually everything to go perfectly, because if your first gadget is a bust or has some fatal bug, you won’t have a lot of money to make a second one.
And once you get a hit, you’ll get hit by cheap knockoffs.
This is the mixed blessing of cheaper manufacturing.
There is something sad about this. The gadget marketplace is the great laboratory of new tech. Gadget start-ups feed the entire tech ecosystem with new ideas.
Tomi Engdahl says:
Erin Griffith / Fortune:
As the list of SV startup scandals grows, entrepreneurs’ “fake it till you make it” ethos garners continued scrutiny from reporters, while investors defend bets — As the list of startup scandals grows, it’s time to ask whether entrepreneurs are taking “fake it till you make it” too far.
The Ugly Unethical Underside of Silicon Valley
http://fortune.com/silicon-valley-startups-fraud-venture-capital/
As the list of startup scandals grows, it’s time to ask whether entrepreneurs are taking “fake it till you make it” too far.
Vinod Khosla did not show up at TechCrunch Disrupt to be harangued by some smartass, know-nothing journalist. The venture capitalist came to talk about disruption and revolutions to an audience of 1,000 potential disrupters and revolutionaries, laptop glow illuminating their faces in a San Francisco warehouse.
After the Wall Street Journal first exposed problems at blood-testing startup Theranos in 2015, for example, venture investors like Greylock’s Josh Elman and Y Combinator’s Sam Altman tweeted defenses against the one-sided “slam piece.”
But as scandals have piled up—and other negative stories have proved to be true—the defensive strategy hasn’t aged well. While some investors are standing by their tainted companies, others are taking pains to distance the bad actors from the rest of the startup pack. Theranos, which has since voided two years of its test results and faces a criminal investigation, is now described as an exception. Just one bad apple.
Lending Club’s loan doctoring? That’s not what startups are about.
No industry is immune to fraud, and the hotter the business, the more hucksters flock to it. But Silicon Valley has always seen itself as the virtuous outlier, a place where altruistic nerds tolerate capitalism in order to make the world a better place. Suddenly the Valley looks as crooked and greedy as the rest of the business world.
“We hope that founders bend the rules but don’t break them. There’s a fine line between entrepreneurship and criminality.”
Tomi Engdahl says:
The Story of Kickstarting the OpenMV
http://hackaday.com/2016/12/29/the-story-of-kickstarting-the-openmv/
Robots are the ‘it’ thing right now, computer vision is a hot topic, and microcontrollers have never been faster. These facts lead inexorably to the OpenMV, an embedded computer vision module that bills itself as the ‘Arduino of Machine Vision.’
The original OpenMV was an entry for the first Hackaday Prize, and since then the project has had a lot of success
OpenMV
Python-powered machine vision modules
https://hackaday.io/project/1313-openmv
The OpenMV project is a low-cost, extensible, Python-powered machine vision modules, that aims at becoming the Arduino of machine vision…
Tomi Engdahl says:
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https://www.arrow.com/en/indiegogo/get-certified
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Tomi Engdahl says:
Fitz Tepper / TechCrunch:
Camera drone maker Lily will shut down and refund customers; after $14M Series A and $34M in preorders, says it failed to raise funds for production
Unable to fund production of its camera drone, Lily will shut down and refund customers
https://techcrunch.com/2017/01/11/unable-to-fund-production-of-its-camera-drone-lily-will-shut-down-and-refund-customers/
Lily, the autonomous camera drone that sold a whopping $34 million in preorders, has announced it is shutting down.
In an email sent to customers about an hour ago, the startup said that it was unable to raise an additional round of funding which would have allowed it to start production of the drone. So it announced instead that it will be winding down the company, and offering an automatic refund to all preorder customers.
Lily’s demise has been a slow one. The startup had delayed shipping multiple times before, first to summer 2016 and then to early 2017.
Lily was one of the first autonomous AI-assisted camera drones ever announced, and was supposed to revolutionize the personal camera drone industry. But in the time it took Lily to ship, others drones like Hover hit the market, and DJI developed autonomous flight modes for the Phantom and Inspire (and now Mavic), arguably the three best drones on the market.
Tomi Engdahl says:
Shmoocon 2017: The Ins And Outs Of Manufacturing And Selling Hardware
http://hackaday.com/2017/01/17/shmoocon-2017-the-ins-and-outs-of-manufacturing-and-selling-hardware/
Every day, we see people building things. Sometimes, useful things. Very rarely, this thing becomes a product, but even then we don’t hear much about the ins and outs of manufacturing a bunch of these things or the economics of actually selling them. This past weekend at Shmoocon, [Conor Patrick] gave the crowd the inside scoop on selling a few hundred two factor authentication tokens. What started as a hobby is now a legitimate business, thanks to good engineering and abusing Amazon’s distribution program.
The product in question is the U2F Zero, an open source U2F token for two-factor authentication. It’s built around the Atmel/Microchip ATECC508A crypto chip and is, by all accounts, secure enough. It’s also cheap at about $0.70 a piece, and the entire build comes to about $3 USD.
The circuit for this U2F key is basically just a crypto chip and a USB microcontroller, each of which needs to be programmed separately and ideally securely. The private key isn’t something [Conor] wants to give to an assembly house, which means he’s programming all these devices himself.
For a run of 1100 units, [Conor] spent $350 on PCB, $3600 for components and assembly, $190 on shipping and tariffs from China, and an additional $500 for packaging on Amazon. That last bit pushed the final price of the U2F key up nearly 30%, and packaging is something you have to watch if you ever want to sell things of your own.
For distribution, [Conor] chose Fulfillment By Amazon. This is fantastically cheap if you’re selling a product that already exists, but of course, [Conor]’s U2F Zero wasn’t already on Amazon. A new product needs brand approval
U2F USB token optimized for physical security, affordability, and style
https://github.com/conorpp/u2f-zero
Tomi Engdahl says:
Programming Thousands of AVRs
http://hackaday.com/2017/01/18/programming-thousands-of-avrs/
It is funny how almost everything has its own set of problems. Rich people complain about taxes. Famous people complain about their lack of privacy. It probably won’t happen us, but some Kickstarter campaigners find they are too successful and have to scale up production, fast. We’d love to have any of those problems.
[Limpkin] found himself in just that situation. He had to program several thousand Atmel chips. It is true that you can get them programmed by major distributors, but in this case, he wanted unique serial numbers, cryptographic keys, and other per-chip data programmed in. So he decided to build his own mass programming workbench.
The bench programs nine devices at a time (due to the number of I/O available) and uses a Raspberry Pi to orchestrate operation.
A Mass Programming Bench for ATMega32u4 MCUs
http://www.limpkin.fr/index.php?post/2017/01/13/A-Mass-Programming-Bench-for-ATMega32u4-MCUs
Or how to try to spend as little time as possible programming several thousands MCUs….
Tomi Engdahl says:
eevBLAB #28 – How To Get A Product Designed
https://www.youtube.com/watch?v=m1qmf72o2Hw
Dave answer a question from the forum:
“How does a hobbyist go about getting a product designed?”
Sposchy3 päivää sitten
From experience, I can say:
– If you’re stuck on a specific problem, you don’t need to find a freelancer. People on forums like EEVBlog and Avrfreaks are always willing to help.
– Fiverr people are generally incompetent, with a few exceptions. Going for the $10 or $20 gigs does not help, nor does looking for stars. Too many people give 5 stars for a mediocre job.
– The best market research in the world is a crowdfunding campaign, assuming you can mock up a working prototype. If it’s your first time, consider Crowd Supply over Kickstarter or IGG. They were extremely helpful with my product; got hands on made sure it didn’t fizzle. If you go through this route, don’t expect a warm response from media unless you’ve already delivered before. They’ve been burned by dodgy kickstarter campaigns too many times and have become wary.
– Unless you’ve already got development experience yourself, it’s extremely risky to hire someone to do it for you. There are things you won’t understand, you’ll learn nothing, and the developer is not going to give a shit about whether or not your vision comes to life; only that they’re getting paid.
– The “last little bit before the product’s ready” will be half the work.
– An idea is worthless unless the person who has it is willing to put in some hard yakka.
Tomi Engdahl says:
Pavithra Mohan / Fast Company:
Etsy announces Etsy Studio, a marketplace for craft supplies set to launch with 8M products in April, to include 60 DIY tutorials at start with more each week
Etsy Studio Is Ready To Turn Your Side Hustle Into A Real Business
https://www.fastcompany.com/3068180/innovation-agents/etsy-studio-is-ready-to-turn-your-side-hustle-into-a-real-business
Etsy’s ambitious new marketplace aims to make it easier for everyone to start creating, and selling, their wares.
For Etsy, which is transforming itself from a niche craft-seller website into a launching pad for at-home entrepreneurs, Brumley and her customers are the future of the business. That’s why they’ve spent the past year creating Etsy Studio, a marketplace launching this April that is dedicated to selling craft supplies, and DIY tutorials. At the same time, Etsy is adding a new service called Shop Manager that will improve the seller experience.
It’s the company’s largest expansion ever. And while Etsy is still dwarfed by the likes of eBay and Amazon Marketplace, the Dumbo, Brooklyn-based company attracts a loyal following of 1.7 million active sellers who reaped $2.3 billion in sales in 2015.
“In terms of numbers, it’s a $40 billion market opportunity,” says Etsy CEO Chad Dickerson.
The simplified search results should help Etsy attract more creators to the platform.
Ultimately, Etsy Studio aims to attract someone like me—an avid browser of Etsy who has long enjoyed making things, but isn’t intrepid (or patient) enough to gather supplies from Michael’s or Alibaba and pair them with a tutorial sourced from Instructables. For everyone who enjoys buying handmade wares, Etsy Studio offers an easy way to begin making them as well.
One of Etsy’s big advantages is that it is relatively easy to use—which might make selling on Etsy more attractive than building a stand-alone site using an e-commerce platform like Shopify, which boasts 325,000 merchants.
The stand-out feature of Etsy has always been its tight-knit community. “Most of my customers are other Etsy sellers, so it’s created this community of people who trust each other,”
Tomi Engdahl says:
2017 crowdfunding guide
https://techcrunch.com/2017/02/27/2017-crowdfunding-guide/
The tech level is going up
Crowdfunding is not limited anymore to cheap consumer gadgets (if it ever was). In fact, simple gadgets that do well, like the Fidget Cube, which raised close to $6.5 million, could be copied even before they ship (the quality of the copies — though made before the original — are in question, but still).
Tomi Engdahl says:
Tindie Chat: All About Certifications
http://hackaday.com/2017/02/25/tindie-chat-all-about-certifications/
Everything from FCC to UL to OSH to CE and the other CE is on the table. If you want to build hardware, and especially if you want to build a product, this is the talk for you.