Have an awesome invention that you want to create and sell to the world? Think you have everything all planned out and you’re ready to just let the money flow in? Maybe not. Take a few moments and read [Jonathan]’s first hand experience of a maker start up business that didn’t go anything like he had planned.
[Jonathan] thought he was ready. He had created a unique product and, by taking pre-orders, didn’t have to front any of his own capital. He had shown that there was demand for such a device. The big problem…supply. Selling things was the easy part. Actually making them was another story. Every step of the way had complications. Printing errors, parts suppliers backed out, an international money transfer didn’t go through, postage rates increased, suppliers sent the wrong parts, and he and his wife had a baby. His stress levels were through the roof knowing that his customers had prepaid and were waiting through all the delays.
In the end, [Jonathan] learned a lot and survived the journey. He is currently working on his next invention. If you’d like to learn more about his experiences, you can message him personally. There’s also a Pianocade features video after the break.
[via Adafruit]
And the sad thing is that,especially if you take into account all the hours of work, you’re actually not making any $$ at all.
Not that it always matter, plenty of people who do “small runs” are happy to run break even , but still ..
“plenty of people who do “small runs” are happy to run break even , but still ..”
I heard that the Dodge Neon was the first American small car (since the Model T Ford?)
to show a profit.
At this point he is probably not profitable, but what you are looking at is the first production run not the life of the product. If you can break even on your first run, you aren’t risking anything but your time. His time investment is the NRE (Non-recurring Engineering).
Of the product’s I have built, all have had a high cost for ‘unit one’. Whether it is profitable in the long run depends on the number of units sold and his pricing.
I learned the most valuable return is the education you gain by doing it.
I backed a kickstarter project that seems to be going through these issues. When the $$ goal was more than met and the delivery date way expected to be only a month and a half away, i didn’t expect any issues because the guy already had a business creating these types of things. Parts from china got shipped via boat, which took over a month, other parts were made with custom molds which had to be reworked a few times, and he didn’t have much in the way of staff to help get things done and didn’t accept assistance from a community that is known for its generosity. In the end, the product i got really failed to meet my expectations, but i chalked it up to a learning experience for myself as a future backer of other peoples projects, and especially the manufacturer who is finding the flaws in his design that have already shipped and some returned.
Moral of the story, He failed to fully flesh out the idea and price it correctly. IF he was not able to ignore shipping charges going up he failed the moment he quoted a price.
“Printing errors, parts suppliers backed out, an international money transfer didn’t go through, postage rates increased, suppliers sent the wrong parts, and he and his wife had a baby.”
Sounds like a typical day in manufacturing. Just need to add in: people calling off sick, someone failing to follow work instructions resulting in several bins of bad parts, suppliers sending the right parts but inadequate numbers, suppliers mislabeling parts, orders being delayed because the purchasing agent with authority to sign off on the PO is on vacation but doesn’t have a designated alternate, and, oh, look, some jerk called in a bomb scare so we all have to evacuate for half a day while the bomb dog looks for a bomb that we’re pretty sure isn’t there.
And counterfeit parts…
A supplier failed to send electronic parts, instead shipping boxes of live scorpions. Yeah, manufacturing has an amazing ability to turn the best laid plans into case studies in murphy’s law.
My favorite is the vendor who quotes a price for some on site work, wins the order, and then sends an installer who works for a day……and then disappears for several days with uncompleted work but no notification of why (missing parts, etc.)
All these companies complaining about work not being available should look in the mirror. Fully half of all vendors that I work with for the first time turn out to be utter shit. I’ll pay good money (and argue with those stupid bean counters in corporate) for a vendor that can deliver what was promised. Many can’t.
Shhh. Companies like that keep guys like us in business. :)
Reminds me of the production of a certain niche handheld …
I’ve noticed a lot of products on KickStarter and similar sites are still in the idea stage and not in the pre-order stage. Just because you have a fully working prototype doesn’t mean your ready to sell hundreds of them. Before even thinking of releasing on a crowd sourcing site you need to have all of the manufacturing contacts made, pricing tables and backup for everything. You need this for several levels of production quantities as all of this will change between 100 units, 1K, 10K. It takes months to get all of this prepared and it seems to be a common blunder by these ‘upstart companies’ and ‘entrepreneurs’.
I’ve noticed people in general, and in my experience technical people in particular, tend to underestimate the difficulty of fields outside their actual specialty. Lots of really skilled inventor/tinkerer types don’t really “get” the management/business side of manufacturing in the same way that lots of general purpose programmers try (and fail) to make encryption systems, lots of engineers right mind-bogglingly shitty code, and lots of managers try to second guess the decisions and recommendations of developers and IT people. There’s being an expert, there’s being competent, and then there’s knowing just enough to be dangerous.
People often forget/ignore the rules of scheduling for manufacturing:
Add 50% to the time the vendor quoted. If they said 4 weeks, assume 6.
Add 25% to the price the vendor quoted. $10/unit? Assume $12.50.
Assume shipping costs will be at least 25-30% of the total cost, especially if you’re dealing with international shipments. Double any shipment times if customs is involved. If your manufactured cost is $100/unit, you will spend at least $25/unit getting it to you. This includes shipping, handling, paperwork, insurance, etc. If you’re quoted anything less, be very, very careful. You’re going to get bit somewhere. Only after you’ve got your first set of shipments can you start looking at reducing that cost.
Nice “rules of thumb” to consider!
Pinball flipper buttons for a keyboard with a span for giants. Square waves, dry. Learning experiment for sure. Loved the 70’s era edits in the video, introducing the Ronco……..squiggly sound…… amazing……..
Manufacturing issues aside, that looks like a really awesome toy! I want!
Also it seems like maybe the moral of the story is:
Only sell the minimum amount of parts needed to call it a kit. If you could just sell the pcb and the custom-made parts, and get your customers a part list, that might be a nice way to get going on something like this. Although the cost to the end-user _might_ be a little higher, you could work out a lot of the kinks without all the headache of assembly, and without minor details derailing the whole project (as much).
Certainly there are more customers who’d be interested in a fully assembled unit, but they can always wait for v2
1. Estimate delay
2. Double that delay
3. …
4. Profit!
Jokes apart, if you want good advice to manufacturing things, have a look a Bunnie Huang’s blog, he made 4 awesome posts to describe exactly this, using the Chumby as a case study.
Thanks HackaDay for remembering to post “failures”. We all can learn from others mistakes, if we are aware of them.