In San Francisco, Hardware Massive put together their first “HW Summit SF” on November 7, 2018. This organization was also behind April 2018’s HardwareCon which we covered here.
Apologies for not getting this coverage out sooner (some HW engineering stuff got in my way), but the insights shared here are still relevant — especially if you’re part of a HW startup. The event’s theme was “Training and Gear to get Through the Valley of Death”.
There were two speaker panels with a bunch of hardware engineering experts. The first was on methodologies for scaling production, and the second was on gear to use in HW development. Then, the day finished off with a “fireside chat” between Scott Miller, CEO of Dragon Innovation and Greg Fisher, CEO of Hardware Massive.
Highlights from all 3 segments can be seen in the video below:
Training Panel Topic:
“Proven Methodologies for Scaling Production in Hardware Startups”
The first panel talked about challenges startups face in jumping from working prototype to manufacturing. Scaling hardware to production is always hard! If you’re a startup, though, there are extra headaches you’ll face that bigger, established companies don’t. As someone with a background in bringing physical products through to mass manufacturing in large corporations who now works with HW startups, I can verify this as being 1,006% true.
First, just finding vendors that will work with your bootstrapping startup is a hurdle. For suppliers, working with startups: 1. takes extra effort because they need to do a lot of clean-up and hand-holding, and 2. isn’t going to monetarily pay off as much. (You will not match Apple’s 2020 projected manufacturing volumes. You just won’t.) That’s why some vendors won’t entertain the notion of working on a meagerly-crowdfunded gadget. Right off the bat, there are resources startups can’t even get access to.
On this panel, however, were representatives from companies that do work with hardware startups. So, what hiccups and common mistakes do they see in startups that get past the first obstacle?
Common Hardware Startup Hurdles
The moderator kicked this talk off with a statistic: 9 out of 10 HW startups fail. What are the top reasons the pros saw as causes of this low success rate?
…a lot of development is done just to prove that the technology works, and it’s not really done with an eye on ‘how is this going to be produced en masse and at a good price point and at a quality/reliability level that’s going to be applicable to the consumer market.’
…A lot of designers are not manufacturers and they don’t design with manufacturing in mind and that ends up being very expensive down the road.
Robert Brakeman, Founder, Amphibian Global
The valley of death for us is people that underestimate the amount of time and effort and cost that has to go into taking what you have that’s working and making it manufacturable and in volume.
Erin McFall, Founder, Kaizen Dynamic
…insufficient expectations around costs, both dollar costs and time costs, and insufficient testing and resolution around the business model — which will be the tool that pulls you out of that valley and helps you overcome those fixed and variable costs.
Will Hart, General Manager, Particle
Dana Madlem, VP Services, Rush Order
. . . eventually, practically all of them will have us pull all of the units off the shelf at some point or another and have us manipulate the product in some way in the warehouse. The distribution network that you build … needs to be really flexible, really agile to be able to handle that.
Our average return rate is about 10%… I think that surprises most people.“
Dana Madlem, VP Services, Rush Order
Methodology Tips and Takeaways from the Pros
- If you’re crowdfunding on Indiegogo or Kickstarter, do NOT sell your product at a discount! If the market doesn’t want your product at the full price you need to sell it at to make a profit, find that out ASAP. Use these platforms as a true market test of your for-realz end price. If the market doesn’t want it, change it or scrap it, but don’t waste money and years of your life unnecessarily.
- Think way far ahead – plan HW and business models at the same time. Especially for products involving things like IoT, things can get complicated down the line. Products requiring any kind of maintenance should have those needs baked into the HW from the start. Is there a feature in a product you sell today that would make your life easier in 2 years? If so, try to add it today!
- Expect the equivalent of a complete HW redesign when going from prototype to manufacturable design. One thing this panel echoed repeatedly was a naive expectation from HW startups that a working prototype marked 90% of the work to get to a manufacturable design. If you think you’re 90% there, you’re probably only 10% there. That is unless you’ve been getting engineering guidance from people experienced in mass-manufacturing something similar to your widget from the get-go. Which leads to the next tip . . .
- Find experts! There is a ton of information available to us through the magic of the interwebs. However, a lot of detailed knowledge involved in manufacturing the components and systems specific to your product are locked away in someone’s head. Big manufacturers producing things in the millions over decades already made lots of mistakes and corrected them. They developed their own design processes and modeling methods specific to what they make around all that experience. That’s not stuff you’re going to find on Google! Talk to as many pros as you can in all areas of your product — from HW design and manufacturing to business and distribution models.
Gear Panel Topic:
“The Disruptive Tools for Kick-Ass Operations that are Changing the Game”
The second panel discussed tools available on the operations side of HW dev. The first question: Where do you see startups struggle the most when jumping from prototype to manufacturing?
Obviously, I’m biased, but documentation. Less experienced engineers just don’t know what that format is of their CAD files, their bill of materials that contract manufacturers expect. . . The manufacturers spend a lot of time cleaning up the BOM . . . it leads to delays, a lot of emails back-and-forth . . .
‘Your part name is screw-that-joe-knows-how-to-install. I can’t use that.’
And so, a lot of people fail or at least see delays in their documentation.
Michael Corr, CEO Duro Labs
I got to speak with Michael Corr at this event and his company, Duro Labs, provides PLM (product lifecycle management) software. Their aim is to provide PLM tools that aren’t completely horrendous (most are). I liked that Corr has a background in hardware engineering himself. So, he’s building into Duro Labs what he wanted as a HW engineer, as opposed to pure SW engineers who build what they guess you might want. You can try it out for free via this link.
Not enough engineering validation of the product before it goes to market . . . Things like, ‘my product needs to go through different temperatures, humidity, vibration,’ and then the product fails in the field, of course.
Dan Radomski, Chief Strategy Officer, Optimal Inc.
We’re out here building tools to make bringing hardware to market easier. Use them . . . You don’t want to be thinking about how you’re going to build a hammer when you want to build a table. . . As a startup, your time is actually the most valuable resource that the startup has.
Yassin Abo El Nour, Director of Product, Dragon Innovation
If you have to do recalls of your product, can you survive that? Because. . .(recalls) can literally kill your company.”
Ashish Aggarwal, Principal, Grishin Robotics
Scott Miller Shares Harrowing Stories of Close-Calls at an Early iRobot
The summit finished off with Greg Fisher, CEO of Hardware Massive, interviewing Scott Miller, formerly of iRobot in the startup days, in a cozy fireside chat. Miller garnered a lot of experience with nearly catastrophic SNAFU’s during iRobot’s first commercial product launches. (One included a design flaw resulting in 100% failure rate discovered right before they were ready to ship!) Now, he uses all those landmine side-stepping skills at Dragon Innovation, which helps HW startups transition more smoothly into production.
To hear Miller tell a heart-stopping iRobot development story including the fix they devised, start watching the video from here (skip to 10:58):
Words of Wisdom from Scott Miller
If you’re new to the game of working with Chinese manufacturers, here’s a quick and dirty guideline from Scott. Get 10 quotes from Asian vendors and immediately throw out the lowest quote. According to Miller, the oddball cheap quote marks a high likelihood the vendor will pull a bait-and-switch, hiking up the price later on. To avoid hidden surprises, get a detailed breakdown of the quote. Make sure it includes things like parts, labor and scrap, and that nothing obvious is missing from the calculation.
What else?
There’s a lot of unknown unknowns and those are the things that are going to kill you. So try to figure out what you don’t know. Which is a little bit of an oxymoron but talking with people and… get a list of things that could possibly happen. And then once you’ve got that, it’s all risk management.
Scott Miller, CEO Dragon Innovation
Miller also wants you to remember that while hardware may be harder than software in many ways, there are also advantages. The extreme difficulty of not just the HW design development, but also building up sales channels and part vendors means if you’re successful, the thing you built is really hard to copy. Sometimes obstacles are the thing that in the end keeps you afloat! (Unless Amazon gets there first, and then you’re *&^!ed.)
Connect with HW Pros and Other Startups
To find upcoming events like this where you can learn from other engineers and experts in the hardware space, check out this page on Hardware Massive’s site. There are also dozens of chapters around the globe, which you can find here.
