Your BOM is not your COGS

“The prototype was $12 in parts, so I’ll sell it for $15.” That is your recipe for disaster, and why so many Kickstarter projects fail. The Bill of Materials (BOM) is just a subset of the Cost of Goods Sold (COGS), and if you aren’t selling your product for more than your COGS, you will lose money and go out of business.

We’ve all been there; we throw together a project using parts we have laying around, and in our writeup we list the major components and their price. We ignore all the little bits of wire and screws and hot glue and time, and we aren’t shipping it, so there’s no packaging to consider. Someone asks how much it cost, and you throw out a ballpark number. They say “hey, that’s pretty reasonable” and now you’re imagining making it in volume and selling it for slightly higher than your BOM. Stop right there. Here’s how pricing really works, and how to avoid sinking time into an untenable business.

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Bill Gross On Why Your Startup Will Succeed

Bill Gross is one of the great heros when it comes to technology incubators. Twenty years ago, he founded Idealab, a business whose business plan is to create more businesses. This started out with just a handful of companies in 1996, and has since gone on to found 150 companies, that have collectively raised three and a half billion dollars. Out of these companies, more than half have either gone through successful IPOs and acquisitions, or are currently operating. That investment has generated a 13.5x return, and created more than 10,000 jobs.

Obviously, when you want to talk about what goes into a successful startup, Bill Gross is the person you want to talk to. We were happy to have him Keynote the Hackaday Superconference this year, and the lessons he shared might surprise you, especially if you’re interested in starting your own business.

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Inventor Services – Maybe Right For You – Maybe

You’ve no doubt been exposed to the ads for various inventor services; you have an idea, and they want to help you commercialize it and get the money you deserve. Whether it’s helping you file legal paperwork, defending your idea, developing it into a product, or selling it, there’s a company out there that wants to help. So which ones are legit, which ones are scams, and what do you really need to make your millions?

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Ask Hackaday: How’s That Capacitor Shortage Going?

There is a looming spectre of doom hovering over the world of electronics manufacturing. It’s getting hard to find parts, and the parts you can find are expensive. No, it doesn’t have anything to with the tariffs enacted by the United States against Chinese goods this last summer. This is a problem that doesn’t have an easy scapegoat. This is a problem that strikes at the heart of any economic system. This is the capacitor and resistor shortage.

When we first reported on the possibility of a global shortage of chip capacitors and resistors, things were for the time being, okay. Yes, major manufacturers were saying they were spinning down production lines until it was profitable to start them up again, but there was relief: parts were in stock, and they didn’t cost that much more.

Now, it’s a different story. We’re in the Great Capacitor Shortage of 2018, and we don’t know when it’s going to get any better. Continue reading “Ask Hackaday: How’s That Capacitor Shortage Going?”

The Challenges of Shipping From China – Life of a Flailing Tube Man

Last summer was an exercise in developing a completely different kind of product from my normal wheelhouse; a costume. My Halloween costume had been so popular that I decided to have a go at commercializing it, and that took me on a path into manufacturing that I hadn’t yet taken; shipping by boat from China. The short version is it’s a ridiculously difficult mess. Continue reading “The Challenges of Shipping From China – Life of a Flailing Tube Man”

Selling Everything, Moving to Asia, and Setting Up a Company

Today I don’t have a hack for you. I have a story, one that I hope will prove useful to a few of you who are considering a move to Asia to chase opportunities here.

Seven years ago, I was a pretty stereotypical starving hacker. I had five jobs: A full-time dead-end job in biotech, and four part-time or contract gigs that were either electronic hardware design or programming. I worked perhaps 50 hours a week, and was barely past the poverty line – I was starting to wonder why I spent so much time in school. I saw the economic growth in Asia as an attractive but risky opportunity.

Check out that image above…France? No, this is Shenzhen and let’s face it: many exciting things are made there (even the copies). After a short visit to the region, I decided to take that risk but not in Shenzhen. I sold everything I owned and moved from Canada to Vietnam and started a company. Over the last seven years things have worked out well, although I certainly wish I had known more about the process before I got on a plane. This article is about the general path I took to get where I am. Obviously I don’t know the legal framework of every country in Asia, but speaking in generalities I hope that I can cover some interesting points for the curious and adventurous.

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Feeling the Heat of High-Frequency Trading

It’s high summer here in North America, and for a lot of us, this one has been a scorcher. Media reports have been filled with coverage of heat wave after heat wave, with temperature records falling like dominoes.

But as they say, it’s not the heat, it’s the humidity, and that was painfully true in the first week of July as a slug of tropical air settled into the northeast United States. With dewpoints well into the 70s (25°C plus) and air temperatures pushing the century-mark (38°C), people suffered and systems from transportation to the electrical grid strained under the load. But as punishing as such soupy conditions are for people, there are other effects that are less well known but of critical importance to financial markets, where increased humidity can lead to billion-dollar losses for markets. Welcome to the weird world of high-frequency trading.

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