As published in EBN Online –
#HardwareIsHard. Crowd funding projects are getting a bad rap these days. Too many are failing and for an avoidable reason. The electronic hardware. If your project involves electronic hardware, read on.
We have all been conditioned as consumers to expect perfect phones, watches, speaker assistants, etc. to just appear in the market seemingly without effort. They should be affordable and glitch free.
On the other side of the crowd sourcing fence, where the hardware designers spend their time, things are a bit different. Here is a typical scenario. You have a brilliant idea, get funding, make commitments on when the production will be ready, then look for someone in China to manufacture the product. You have never done this before, but no matter, these guys in China can make anything. (And, many can with the right hands at the wheel.)
Here is reality. Six month to three year delays….if the product ever actually gets released. Investor money is depleted, leaving stressed and angry investors.
I am writing this because I have lived through the pain with many start up projects that have spent more time managing early investors than managing the guts of their business…which should be delivering solid product. Let me help.
Like Farmers Insurance reminds us: We know a thing or two because we have seen a thing or two.
Mistake # 1: The design is not really ready for prime time. Even the biggest names in the industry take many months or years to develop and perfect the products. And even these giants can have spectacular fails (#Sony batteries, #Takata airbags)
Solution: Be patient, precise, and make sure you actually have working prototypes before you engage production manufacturers.
Mistake #2: No strong technical resource in house. So, here is a question: What if the prototypes come in and they meet the spec but do not work? What then? Who is there to communicate with the factory to work through the changes?
Solution: At minimum hire qualified contract design engineers. Make certain they are sufficiently vested in the project to see you through all fixes necessary to arrive at that perfect execution of your promised product. Your manufacturing team will need this resource to get into the nitty gritty and solve the problem(s).
Mistake #3: Unrealistic production release expectations. Committing to a production date before the prototypes are finalized is legendary. Most projects require from two to 10 re-tries (spins) before all the performance marks are hit. Each problem takes time to understand the appropriate fix, and then time to test the spin. If you yield to the pressure of “when will it be ready,” you have set the stage for lost sleep, high emotion, and angry investors.
Solution: The best answer is honesty. Something along the lines of “We are in the final development phase before prototypes.“ is better than courting disappointment.
Mistake #4: Poor factory management. Hardware is truly hard or at least not simple. Anything that can be misunderstood through incomplete specs or language miscommunication, will be misunderstood. That is a promise.
If your team has limited experience dealing with a manufacturing facility, here is just a partial list of problems that can occur:
- Documentation that is not checked and re-checked
- First article samples not requested
- Bill of materials not clearly spelled out and substitutions not controlled
- Financial terms with supplier that do not protect you
- Linear production ramp without steps and phases
The solution here is do not go it alone. Admit that this is not your core skill and hire manufacturing design support to manage the process….before it gets messy. Don’t go it alone. Hiring design support can help avoid problems before they begin.
Mistake #5: Thinking manufacturing in Asia is straight forward. Typically, startups want to manufacture in Asia to stay competitive. And they are right, Asia manufacturers are unmatched in low cost, high volume contract manufacturing services. And Asia manufacturers are all over the internet offering their services. Before you go down that bunny trail alone, consider taking the list of problems above and compounding those with:
- Language differences
- Cultural differences
- Business practice differences
- Time and distance differences
- And the big one, lack of financial recourse
Our expertise is Asia manufacturing. I often remind people, a trip to Asia to source a product is $10,000 to $20,000. Meanwhile, the trip to go sort out the first issue is another $10,000 to $20,000 with zero assurance the problem will not repeat. The cost savings associated with sourcing from pre-vetted suppliers, and buying through experienced locally based teams, can represent the hundreds of thousands of dollars.
Acknowledging your lack of hardware development and manufacturing expertise is the first, second, and third steps to avoiding the hazards. Find a team or an individual who will work alongside you as your coach and guide. Someone, who is invested in your success, whose advice you can trust at all of the decision points….because there will be hundreds of those before your $100 investor praises you on social media.
#HardwareIsHard. Don’t go it alone.