Hardware startups

I wrote a pretty extensive post on Quora about how to build hardware products. Here's an excerpt...

Designing for mass manufacturing is essentially impossible to learn without actually building several products. The challenges of negotiating with suppliers, verifying components, orchestrating supply chain logistics, and maintaining quality standards will swiftly kill a cash-constrained startup. But there's good news: unless you're on the cutting edge of a specific technology (like Apple with displays or metalwork), the problems you encounter at scale have very likely been solved by others. So the task then becomes to find those individuals or companies and hire them quickly.

PCH International is probably the most well-known of these firms. They notably make Kindle, products for Jawbone, and all the accessories for those dudes in Cupertino. Because they often work with big players, they're able to leverage large contract manufactures' (CMs) quality standards and economies of scale for smaller production runs. Currently PCH is also aggressively going after hardware startups and recently launched PCH Accelerator, which is essentially a strategic investment group to fund partnerships with startups.

Another option is Dragon Innovation, who works with Pebble, Makerbot, Sifteo, Leap Motion, and others. They're based in Boston and have recently partnered with the brand-new hardware accelerator/investor BOLT. They're certainly less flashy than PCH, but still know how to deliver.

HAXLR8R (Shenzhen) and Lemnos Labs (San Francisco) are other startup "accelerators"-- kind of like a hardware-flavor of YC. They seem to be more focused on the R&D stages (pre-Kickstarter) than production. For some personal anecdotes by others, see What startup incubators exist for hardware companies? [link]

One way to think about contract manufacturing in China is with the "smile curve" popularized by Acer in the early 90s. It's essentially a graph of a product's extractable value as a function from creation to sale. On the left is brand, high-level design (IxD, ID, PD) and any specialized R&D. In the middle you have component sourcing, supply chain management, manufacturing, assembly, and shipping. And then on the right you have distribution, retail sales, marketing, and partnerships.

... it goes on with more examples. Full post: http://www.quora.com/Michael-Grinich/Posts/Product-manufactu...

Funnily enough, Liam Casey actually often calls PCH the "APIs for manufacturing."

I'm doing a hardware startup at the moment. While the article seemed to focus on electronic hardware, I am developing a product that advances the state of the art of scuba diving (an automatic buoyancy compensator). I couldn't have done this ten years ago. I have hired an engineer in a different country on Freelancer.com, pay him with Paypal, make our designs on Sketchup, am printing our prototype on a Solidoodle 3D printer, and am ordering various hardware from manufacturers' interactive websites. I am literally working out of my basement. I will likely license it to major scuba equipment manufacturers, but may make and sell the product myself, probably borrowing heavily from Tim Ferriss’s book, "4-Hour Workweek". Thanks for all the commenters' input. I have bookmarked a lot of these links for future use.

The inevitable 'competition from lower cost manufacturers' is a likely fear among many hackers today, but one extremely good point that Chris makes is to complement hardware with software. Scaling with hardware can seem tough, especially with competition from lower cost manufacturers, but incorporating software gives companies an edge AND hopefully the ability to scale.

But playing devils advocate, it may be tough for startups to find the resources to have a hybrid hardware/software company from the beginning. It just seems like a daunting idea to start a hardware company. BUT, with crowdfunding having become so popular, startups may be able to raise enough money through initial sales from their hardware that they are able to put that money towards creating unique software.

Sorry for all the back and forth, just was thinking/writing out loud!

I'm currently working on a hardware startup. The barriers to being able to do this have definitely lowered thanks to CNC (moving to 3D printing soon), Arduino, and lower component costs - not to mention the fact that a lot of cell phone components now come bundled in modules and eval boards are easy to play with (all things that were mentioned).

One thing that I think still needs to come a long way is the amount of shared knowledge on hardware design. My co-founder and I both went to school for Mechatronics Engineering, and one of the biggest obstacles we have run into so far is that there just isn't as much shared knowledge on the internet when we run into problems - unlike software.

I'm currently doing a hardware start-up. I totally agree with the crowdfunding strategy, especially if the technology has a mobile angle.

The problem we have is IP... IP management is such a burden for a small start-up. I'm working with a University technology office. While they are great people (really), it still adds a layer of complexity to an already tough situation (IMO, start-ups do not benefit from having more people at the table). Add in lawyers, and it becomes an order of magnitude more expensive than your typical software start-up. And the IP you get from a University is so raw... the cost to develop it into a consumer ready product can be immense.

On the other hand, it has been an education.

I'm not sure there will ever be a pure AWS analog in manufacturing, but http://www.dragoninnovation.com/ is pretty close to offering "Manufacturing as a Service." They've helped Pebble, MakerBot, Sifteo, Romotive, and dozens of other companies make it to the market more efficiently than if they'd run solo. I wrote this story about them at Wired (http://www.wired.com/design/2012/06/dragon-innovations-manuf...)

  "There is no AWS-equivalent for hardware."

Someone want to make a few billion dollars?

I wonder , when building a HW product what embedded platform people here use for manufacturing ? Arduino/Mbed/plain microcontroller?

And if you use arduino , how do you manage the need to release object files (according to the arduino license) ?

Good article. A few points:

> There is no AWS-equivalent for hardware.

Well, yes and no. Of course, it doesn't make sense to talk about AWS for manufacturing. Making physical items means that your supply chain, manufacturing process and channel of distribution have different time constants when compared to pure software-and-servers businesses.

By this I mean that step changes in supply, production or demand happen at far slower rated than in pure software products.

If by "AWS" we mean a manufacturing system that allows the entrepreneur to turn on and off chunks of manufacturing capacity with some immediacy and granularity, no that does not exist. And, that is so because it is just-about impossible for most consumer products.

The supply chain for most consumer goods is such that it has to start being stuffed with components and assemblies weeks in advance of manufacturing. Some OEM components have lead times measured in months. Others have MOQ's (Minimum Order Quantities) that can force commitment levels both to product volume and manufacturing effort/timelines.

As an example, I am currently working on a project --to be featured on Kickstarter-- that requires a custom aluminum extrusion in order to be able to manufacture it economically. Aside from tooling and setup NRE's most extruders have minimum buys that can range up to 2,000lbs of aluminum. In other words, once you play that game you are all in and committed to manufacturing at a certain level. Once these processes start you simply can't logon and stop them from your browser (or spin-up new ones) as you might do with AWS.

> Proper planning is essential because mistakes can be unrecoverable. For example, you might create a design that fails environmental tests but only discover this years later when you are about to go to market.

Right. And this is why elsewhere in the article he mentions that a lot of hardware entrepreneurs are older and more experienced engineers. When it comes to physical product manufacturing, experience can be invaluable. There's a lot that simply isn't learned in school. You can't recompile your way out of a design error.

> The build-test-iterate model that is popular in software startups doesn’t translate well to hardware startups.

Well, it does in certain domains. For example, every FPGA-based design I've done goes through extensive simulator testing before actually being committed to real hardware. The same is true of such things as high speed signal and power integrity (using field solvers and other tools).

When it comes to mechanical and thermal design a lot can be done with modern CAD systems through simulation. As an example, we devoted no less than six months to the design and simulation of an advanced liquid/forced air thermal management system for a 1,000W (yes, one thousand watt) LED array. The simulations were good enough that we could go to metal knowing we were going to be reasonably close.

The same is true with mechanical and plastics simulation.

Now, if what we mean by built-test-iterate means the inclusion of the actual end-user in a real market situation I have to say, yes, it is much harder. This is where prototypes are designed to be easy to change and adjust in order to experiment with form, fit and function.

In the end hardware startups are very different animals. I am not sure they can be compared through the same metrics.

Not only these, there are niches in hardware too which aren't immediately attractive to the big boys - like think of doing a new digital stylus but not a tablet. Playing it low gives for the necessary time and opportunity and then, like PG says, startle the world with something nobody ever thought of.