Why Starting A Kickstarter Could Kick Your Butt

So you’ve come up with a great idea and now you’re thinking about starting a crowdfunding campaign – and why not, all the cool kids are doing it. Now, let’s say you already have a working prototype, or maybe you even built a small run for friends online. You’ve made 10 here, or 20 there. Sure it took some time, but making 1000, or 10,000 would be so much easier once you get all the orders in, right? Wrong.

Before you even think of setting up something like a Kickstarter, we would like to invite you to have a seat and watch this series of videos covering the things many people don’t know about manufacturing. It’s going to cost you 7 hours of sofa time, but if you’re serious about getting something to production these seven hours will pay in spades. Dragon Innovation has had many notable clients over the years – Pebble, Sphero, Makerbot, to name a few. They help startups find their way through the manufacturing mine-feild, for a fee of course. The founders are former iRobot employees, and have quite a bit of hard fought, yet free knowledge to share.

You’ll learn about how important decisions early on can make huge impacts on the success or failure of a product. There’s quite a bit of raw technical info on injection molding, design for manufacture, testing, pricing and everything under the sun. So do yourself (and everyone else) a favor, and before you click submit on that Kickstarter campaign, sit back and enjoy this free seminar.

We’re really enjoying the manufacturing oriented videos which have been popping up. Just a couple of weeks ago we came across a pair of hardware talks from [Bunnie Huang] that were a pleasure to watch. At 20 minutes this might be a good primer before you take the plunge with the playlist below.

59 thoughts on “Why Starting A Kickstarter Could Kick Your Butt

    1. I subscribe to tooling/plastics tradepubs and read them often. There was an article bout an eastcoast co. that helped out a kickstarter guy make rotomolded furniture. It fit together like lego’s.
      …Unfortunately I can’t find it!

    2. If your product is on variable demand, like most of goods, price is a deciding factor whether the customer will buy or not. You can of course propose a “made in my country” product and leverage patriotism to justify an higher price.

      1. If you have(make) friends who are in an industry, lever on that. Supply ups and downs always are paid for in some method… negotiate and “share the love” on production. Shop around, and respect the person you’re dealing with.
        …I speak from experience. I manufacture affordable molds and providing production parts at work. Affordability can be a go/nogo factor…

    3. There is a single PCB house here in NC, USA. American Circuits they are top notch and very helpful but you get their help at a premium. Roughly 2x as expensive as a Chinese fab… but you get what you pay for they always call if there is something questionable about the design. The Chinese place on the other hand has made boards that didn’t “make sense” I think American circuits would have caught it… not at issue at the time since it just meant 2 out of 3 of my sub boards didn’t work (I copied the design by block copy in kicad but forgot to update the ground plane … and it doesn’t do it automatically bleh)

      American circuits is operated by some very friendly people of Indian decent, they’ve been around in NC for years but still have an accent , I believe there are a quite a few locals working there as well.

      The other upside is that they are like 5-6 min down the road from where I work in Charlotte… that is hard to beat. They even let you pick up the PCBs in person if you need them in a hurry.

      To get a quote from them you just need to send them your set of gerber files, (top ss, top solder mask, top copper bottom copper, and edge cuts layer), a bill of materials with component references, a centroid file with matching references. I use a tool called “visual place” to validate my design before ordering as well as 4pcb’s freedfm checker (I order prototypes from them sometimes as well as they are quick). Your bill of materials just needs manufacturer part #, I think they like having part numbers for places like digikey as well for convenience or if you have alternate part numbers that will work and they’ll source them the cheapest place or they can also source components by value/footprint for a small fee I believe.

      USA USA USA!!! … ahem

    4. The decision to go off shore for manufacturing has nothing to do with ethics. The decision has everything to do with managing cost and quality.

      Lets say for example you invent a better blender and you decide to manufacture in the USA. Blendtec comes to mind – they have a great product and they boast “Made in USA”. And it’s great that they can, but you have to realize they can manufacture in the USA because they have a highly automated and efficient process. No start up can invest 20 million dollars in automated CNC equipment plus another 6 million in a modern surface mount line plus another 10 million in robotic final assembly. And BTW, you haven’t hired anyone or turned the lights on yet! And even with automation I bet their motors and power transformers and just about every part they place on their boards come from China. So, I’d argue that even products “Made in USA” have quite a bit of foreign content. So, the decision becomes down to – what percent of my product do I want made overseas?

      We have to make the same decision with our products. We are a small shop and I do all of the aluminum housing machining but the housings are Made in China because you just can’t buy them here. The SSRs (Solid State Relays) we use are Made in China. Bottom line is we can buy SSRs from a quality manufacturer in China for $12.00 each or we can buy a well known US brand for $49.00 each. And guess what’s on their label? It states “MADE IN CHINA!” We have a small surface mount machine and not a surface mount line, but even that small table top machine cost $14,000. And every part we place on a board is “MADE IN ANOTHER COUNTRY!” The raw boards themselves are Made in New Jersey, at least for now.

      1. “The decision to go off shore for manufacturing has nothing to do with ethics. The decision has everything to do with managing cost and quality. ”

        what’s truly sad is you honestly think that..

        you mind is so twisted that you don’t think ethics plays any part in this, every times a company choices to outsource to somewhere that allows lower pay/working conditions and environmental protections is people like you choosing money over ethics. your argument is the same one used by southern slave owners or the robber barons when they lock women in sweatshops and watched them burn to death.

        no the any unholy thing you care about is how much money you and your investors make the damage you cause while making that money you’ve blinded yourself too. and that’s why you hate getting called on it you know it’s really about.

        it’s always about ethics.

        1. It is absolutely not possible to make things now. Even when you think you are buying stuff not from China or other cheap place you will always find that if you did deep enough then that is where it comes from.

          It is the governments job to stop it not the public’s job.

          I have tried it both ways and you end up with a 20:1 or more price difference.

          Steel made in the West where we have the health and safety that would cripple any manufacturing cannot ever compete with a factory that kills 10 people a week because of their unsafe practises.

          Reading the Chinese papers there is never a week goes by without some dozens of miners being killed. It is absolutely not possible to compete on price and people will generally not spend more for the same product. They make all the right grunts on TV about patriotism and all that BS but when it comes to emptying the wallet they will buy the cheapest.

          1. Not possible? Or difficult?

            It is. right now, far easier to make things. People in the past had to do so much more legwork than people now.

            Spoiled internet brats.. And I am ‘only’ 35..

          2. Clovis- you are like what, 15 years old, discoursing on the potential for manufacturing now vs any other time?

            LOL… The internet.. Enables you to broadcast this inane thought to countless people, but you probably think it is harder to communicate now than in the past also.

          3. I remember seeing a plastic part where I used to work that was labelled “Assembled in the USA”
            And I kept wondering, “what the heck was assembled, it is a single piece of plastic”. After a few days it occured to me that someone put the label on to call it “assembled”. Gag!

        2. The decision to move a product off shore or not to move is just one decision made by a business and you can’t call a business unethical just because they move a product to Mexico or China or from one state to another within the USA. Ethics are wrapped in every decision, not just business move decisions. Companies just like people have personalities and can be ethical or unethical.

          One good example that is happening right now, Remington is consolidating much of their manufacturing in North Alabama where they will eventually employ over 2000 people. A huge looser in this move is Ilion NY, where they have been making guns for 199 years. And the reason? RUGER is kicking their collective butts in gun sales. The tax environment in NY State is a huge factor. Because of the tax environment it’s very expensive to do business in NY State and those costs flow right down to the product they manufacture. And BTW NY State is my home state but I live in Alabama.

          And as far as making money is concerned? Should a company not move a product off shore or to another state and as a result not be competitive and then go out of business? Or should they move products where they can be manufactured less costly while keeping quality up and thereby retaining most of the jobs they have in the USA? Should a company retain jobs for it’s Employee’s benefit or scale back to remaining profitable and stay in business?

          You can call it greedy business if you’d like but at the end of the day a business runs on cash flow. No cash flow = going out of business and no-one wins. Negative cash flow = going out of business even faster!!!! I’ll lay off 1/2 my staff in a heartbeat if it means keeping the other 1/2 employed, and BTW the decision will include retaining my profit!

          1. Tom, I just wanted to say thank you for telling the truth. There are a lot of trolls beating on you that have no idea what they are talking about. I’ve run a few hardware startups, I’ve been to China, I know exactly what you’re saying and you’re absolutely right. Keep up the good fight.

          2. No Bob, he is not ‘absolutely right’ – he has a political point of view, an economic interest, and is stretching logic when he claims only one possible approach will work out.

            Sure it is appealing to use slave labor, and it is nice to never see workers as human, but a false dichotomy is false by nature.

            The simple fact that companies exist which do not go offshore PROVES… PROOF.. That there are other ways.

            Also, arguing that something is the easiest method does not make it moral or ethical – that is just lazy self-serving bullcrap.

            I have been involved in about a dozen startups. I have visited dozens of American manufacturing facilities.

            If it is not possible to make stuff in America, why are people still doing it?

            The last 20 years has seen a trade-policy inequality – in which USA has opened ‘our’ markets to foreign products, but much of the world still practices logical protectionism of local labor and trade markets.

            USA is a cheap wh0re at this point, but that does not mean that is the only possible paradigm.

            Lazy lowest common denominator race-to-the-bottom thinking is lazy – not profound.

          3. Generalizations are no good. I’ve been to PCB assemblers in China, never saw a slave. Au contraire, factory were clean, workers were using safety equipment, and was a nice workplace.. I’d work there.

            Sure, they were small PCB shops, not Foxconn.. But hey, iPhones are cool, and Apple is a great company… (hahah)

            What I’m saying is, not all electronics assembly lines in China are Foxconn, and not all of them work for Apple or HP, companies that sell millions of overpriced products that people buy without thinking..

            And no, I’m not chinese.

        3. Fine and all – but once you run out of money, you run out of “choice” and then you can no longer choose to be “ethical” – you have to do what you have to do or starve.

      2. Off-shoring has everything to do with ethics. Support the community you live in first, your municipality second, your state third, your country fourth (or your local version of that model, depending on where in the world you live). If you haven’t found someone to supply the product you seek within those four rings, then consider making it yourself or living without it. Any manufacturing/purchasing decision that breaks that community-centric model is in some way or another compromising their/your ethics and you have to decide for yourself if that’s something you’re OK with, and to what degree. That’s a personal decision.

        Sure, some “stuff” you think you desperately need won’t be available. Boo-frickin-hoo. We’ve survived a long time as a species and only recently have we developed a fixation with owning everything *right now*. Subjugating others has always been a successful (for the oppressor only, of course) model of collecting and converting raw materials into useful goods, but that doesn’t make it right. The modern demand to *have it all* is what’s driving the separation between the upper and lower classes (globally) farther and farther apart. We’ve become so blind to this, that we’re in near complete denial. But that doesn’t change reality. If we chose to be completely fair to everyone at all times in all things related to commerce and industry, no one would make a net profit but everyone would live a decent life… the system would, in fact, achieve equilibrium, and improvements and developments would continue to occur but to the benefit of all. Of course such a system would require holding firmly to one of the foundational tenets of nearly all of the world’s belief systems: loving your neighbor just as you love yourself, or, to re-phrase, considering yourself to be equal to all, and nothing more.

        Every single time any one of us, or any of our forbears, chooses/chose to value themselves over someone else for sake of some sort of gain, then the equilibrium of the system got a little bit more out of balance. Repeat that billions of billions of times in the history of time, and you end up where we are today: increasingly unbalanced as a civilization, with growing poverty and increasingly poor conditions for growing numbers of people, as a comparative few continue to rise incredibly quickly. Every single decision where you in some way put some aspect yourself in a higher position to the detriment of another person contributes to this inequality. Every. Single. One. Let that sink in.

        Can this be changed at this point? Good question. Think about it, and act on your conclusion. But remember, it’s always about ethics.

        1. Off-shoring helps keep American companies competitive in a global market, and BTW the original article and this conversation has nothing to do with social status or income inequality. Those are entirely separate subjects. But since you insist on making this conversation about social status and income inequality we can discuss these subjects too.

          Everyone reading these threads understands that some have more than others and in some countries we do business with these inequalities are pushed to the limit. I disagree with these inequalities as much as anyone else, possibly as much as you disagree with them. But these are all sovereign nations that we in the USA do not have the authority to govern. I am happy to note that in case you missed this small fact, the USA pours BILLIONS of dollars in foreign aid to help prop up the poorest members of this world when and where we can. But we can only do so much because as I already mentioned, these are separate sovereign nations and in some cases the local ruling parties reject our help. They would rather let their people starve for risk of losing control!

          Are there USA based companies intentionally taken advantage of some of these situations? You are darn right there are! Should we not do business with countries that don’t live up to our social standards? Should we become an isolationist nation? Some think we should, but if we do we stop competing with the world economy. England tried this with their automobile industry and where is that industry now? I’ve heard the “protect US jobs” rhetoric and in every case where I’ve seen it in action the results have been disastrous.

          Look at the flip side – a truly global company called Apple. I’m sure you’ve heard of them, right? And you also probably know the I-phone is made in China and think this is a social injustice? But consider this – the fastest growing emerging cellphone markets are India and China. Apple is sharing in those markets and bringing the profits back home to US stockholders. Do you really think that Apple could compete in India and China if the I-phone were built in the good ol’ USA? And even more important, do you really think that Apple could compete with SAMSUNG in the USA if the I-phone were built in the good ol’ USA? The answer is an absolute no.

          Yes, I guess you are correct, every off-shoring decision is about ethics. American companies need to decide if their off-shoring decisions are best for the long term health and viability of the company. Make the right decision and they stay in business and keep US citizens employed. Make the wrong decision, and sometimes the decision to not off-shore is the wrong decision, and they go out of business. Then no-one wins, not the ‘rich’ business owners or the ‘poor’ employees who work for them.

          One question to ponder before throwing USA income inequality and social justice in this country into the conversation. Have you ever been hired by a poor person? I think you know the answer.

          1. Many people here seem to be of the opinion that stopping trade with poor countries will decrease exploitation. You couldn’t be more wrong. Bringing in money from outsourcing in western countries creates a stronger local economy here in Asia. The growing middle class in China are demanding the luxuries and freedoms we’ve gotten used to, and the government has had to go from ‘you can’t own a bike’ to ‘you can have a mansion with mostly uncensored cable tv’ in under 20 years.

            I’m currently living and working in one of the poorer parts of Malaysia. I visited Penang recently, where almost all ‘American’ ICs are made (Linear, Fairchild etc). Everything is better there. The roads are smoother, the cars are newer, the people are healthier and far smarter. Even the dirt-cheap restaurants (where laborers eat) can charge RM2 for a can of drink, rather than the RM1.40 I pay here. I travelled to China to meet with a manufacturer and it’s not how you’re imagining it. The workers are educated, have families, cars, local soccer teams, and go out for a beer with their friends after work. They even have fully-automated mah jong tables. In 2003, no Chinese citizen even owned a car. They’ve left the 3rd world mentality of big families of laborers behind, and now most Chinese families are choosing to have one child who will be highly educated.

            Outsourcing has helped Asia immensely. Look at the quality of life in countries we don’t outsource to. Bangladesh’s chief export is labor. Their people go overseas to work for less than minimum wage in Qatar, where the legal system allows their passports to be held ransom to effectively make them slaves. I’m sure they’re grateful we’re not exploiting them while they’re killed on a worksite their government has no control over.

            Look at different countries and when we began outsourcing there, and how developed they are. Japan first, then Malaysia, then Thailand, then China, then Cambodia. The longer we outsource, the richer they get.

            The only valid reason people don’t like outsourcing is that it requires western workers to upskill to remain employable. Sadly many people refuse to do this, but for the world as a whole to develop into being more advanced, it’s people must too advance their skills. Asia isn’t waiting a lifetime for development, so we can’t afford to wait until we die and are replaced by our children for our jobs to become more challenging.

          2. The “income inequality” as espoused by U.S. Progressives today conflates income with wealth and wealth with value. For example, the notion the Bill Gates or the Koch brothers “have billions” when others have very little is false. They have plenty but what have is net worth in the billions. They don’t have the money and they can’t get it. Their “wealth” is based on the market value of the shares of their companies and other investments. If the billionaires in the US tried to convert their “wealth” to cash, the economy would collapse and they would get pennies on the dollar if that much.

            Imagine what happens to Microsoft stock value if Bill Gates starts trying to sell billions of $$ worth? Of course it plummets and buyers dry up driving value even lower. If Buffet and a few others join in, pension funds collapse, and industries fail as the ability to borrow fails. How much do they hold in government bonds? Can they just sell those with no effect? Progressives have a Scrooge McDuck view of the highly productive people as having vaults of gold instead of the reality that they have stacks of stock certificates that can become worthless overnight. They simple don’t have $billions and they can’t get it. The only person with billions in gold and cash that I know of is the Sultan of Brunei – and Putin.

            And this argument about ethics of paying people in China to work for you? Progressive ethics – the type that says everyone should be in a trade union or guild, if not they are cheating guild members by doing the job too well and too quickly. After all, what do you pay your dues for if not as a protection racket? Really really nutty stuff.

            Looking forward to the 7 hours.

    5. I would only like to point out, that “domestically” means “China” for some of our readers here, and certainly doesn’t mean “USA” and “dollar” for the majority of us. The world is a big place.

    1. Just be careful when you assemble a team if that is the route you take…. make sure they are honest, and can actually do the work. Personally, I tend to undersell myself… which isn’t always good but it does mean people are pleasantly surprised when you pull off something awesome. Arrogant people are more trouble than they are worth!

    2. I’ve been involved in manufacturing for almost 40 years. Assemble a team? Make sure they are honest?

      Here’s reality guys. Set up shop and hire the best people you can find. And let’s say you start out large enough to hire 20 – that’s a lot of folks for a start-up. Now run for two years and look back. I bet that less than three of the original crew will still be with you! Why? It’s called turn-over! Some will have moved on to better things, some will have quit, and some will be fired by you! And every one of those turn-overs will have cost your business at least $10,000 each in rehire cost, training cost and lost productivity. That’s almost $200,000 off your bottom line and you wonder why companies have things manufactured in other countries?

      1. I agree with this no matter who you hire they might just see it as “a job” they won’t care about your product like you do and can & will leave at the most inconvenient times. If your serious about starting something up, Look abroad and look at home find what fits your product best. There is no one answer for all products if your product is a money saver your probably better looking abroad, If your product is selling itself on quality, reliability and your brand demands that “made in ……….” badge do it.

        China is not all poor quality knock off crap these days, there is still a hell of a lot of that but look at the DJI Phantom their a quality chinese brand. China might be the answer to your prayers and can still provide quality at a good cost. Just be really careful if you have a real innovative product, Clones will probably turn up on the shenzhen market before you have finished production.

        Just to let you all know I have never produced a product but I have looked into it extensively, I run my own business so I do have a great understanding of business. If your serious it will take over your life you will be married to your product/service but it is also a great load of fun and well worth it.

        1. I agree that most things are worth outsourcing, and that there are some products worth making in western democracies. Safety equipment, medical devices, ‘risque’ personal bedroom items etc. There’s a value to the trustworthyness of things being made right under your nose.

      2. One does not “set up shop and hire a bunch of people” we contract the work out. Which costs way more “per unit of work” but allows one to adjust the running costs of the business with the turnover. Nobody can live at the mercy of the bank. With the design tools we have available now, one designer is doing the work of perhaps 5 of his colleagues 10 years ago. The price per design-tool seat is however so high that you have to run that CAD-seat for 24/7/365. It doesn’t make sense to buy, we rent instead. Everywhere.

        The real reason people get things manufactured in other countries is that one can simply outsource all responsibility for whatever happens at the production line, with the environment during the manufacturing of the materials et cetera. This is why things are much cheaper from China – and there are much worse places than China. Pakistan and Bangladesh for example.

        When we say “Human Resources”, we mean exactly that: Humans which have a value that should be extracted as efficiently as possible and the waste disposed of in a safe and economical manner. Robots costs financing and maintenance, people are pretty much free – If ever one sees a really filthy factory with shitty working conditions, it will be people working there – even in the 1’st world. If they have robots, one could safely eat ones dinner off the floor.

  1. You could just do what the one and only crowdfunded project I invested in did: once you have the crowd fund money, buy your CNC machines and pretend you are making and shipping to the first investors but really you are starting up a separate company that will take over the machines and start selling to the public so you can shut down the crowd funded one and never fulfill any of those orders.

    This is why I don’t support crowd fund things.

      1. What if you have a product but don’t want or cannot take on investors? I run a non-profit and developed a product I hope to sell and the only route for me to raise enough for the first round of boards is crowd funding. What about open source projects?

          1. Yes, but open source hardware can often be very difficult to make for the average user. If you dont have access to surface mount tools a lot of projects are out of reach, so someone has to step up and get the hardware made, and Kickstarter can be a great way of doing that. Look at the HamShield as an example.

      2. Crowdfunding is just a tool. It’s a means to an end. I personally like crowdfunding but I believe that most of the projects I have followed were asking for too little. For example, I watched a startup brewery ask for 40K and reach their goal, only to run out of cash and fail later. They should have set a goal of at least 120K.

  2. Why worry about those complicated bits like manufacturing or delivery. It seems the easiest Kickstarter business model is to take the $1m cash and just type an excuse every month with no risk or comeback.

    Just take a look at the Agent watch. Brought to you by the lovely guy(s) at Secret Labs who somehow still seem to have the time and resources to bring out new Netduino boards.

  3. sadly, there is no real difference between a successfully funded Kickstarter and any one of the millions of dot-com bombs or failed startups other than where the money came from.

    The thing enthusiasts and pundits ALWAYS miss or deliberately neglect is scaling. Some things don’t go bigger, and others take a logarithmic scale with difficulty. Many great ideas and prototypes died here in Silicon Valley, Ive witnessed tech hardware that was brilliant in design, intelligent in execution, but not funded enough nor was there sufficient understanding to go to the “next level”. Some companies did great small but died upon expansion. And among the lucky few that the pundits hype made it big because someone with the understanding took over and often booted out those whose vision created the company’s flagship product in the first place.

    taxes, regulations, all those laws everyone loves to keep their backyards clean and those “evil” corporations paying their
    “fair share” come back hard and stifle that innovation that everyone claims only the “right wing talk radio” sees happening.

    I know an excellent electric motorcycle company that only exists in the Bay Area because it is not big. If it becomes “successful” the city and county will make it impossible to operate and do what they’re doing now. Every tech blog owner/investor loves Uber because it profits solely by dodging those same rules and regulations that it’s owners celebrated and voted for in the first place.

    But as I think of it, Kickstarter isn’t supposed to be the home of the seeds for the next megacorp. Its supposed to be the small idea that wasn;t big enough to attract the angel investor. It’s supposed to be the garage guy who makes a few hundred of one thing and moves onto the next project.

    But KS makes more money off the “dream big” than the “dream small” too so there’s that.

  4. I don’t understand why HAD is so overly negative about crowd funding. This article could easily have had a neutral or positive tone. It is hard to do hardware, and I don’t think it’s generally suitable for cutting edge* technology, but its useful when done right, and it fits well with “hacker values”.

    You sell at least one crowdfunded project in your store (reload pro), and write positively about other and their creators (bunny with the novena, osman with the hack-rf for example). Why not push how to do it right instead of just bemoaning the whole thing? The actual content of this article (after the title and intro) is fine (seems like a great source for anyone contemplating a production run). The comment section is it’s usual HAD sour rambles.


    1. I had a misspelling like that this morning. I sent a text to my wife that said “You look lovely today” and it came out “You stupid bitch you ruined my life”. I hate those tiny virtual keypads!

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