Hardware is hard, manufacturing only happens in China, accurate pricing is a dark art. Facts which are Known To Be True. And all things which can be hard to conquer as an independent hardware company, especially if you want to subvert the tropes. You may have heard of [Spencer Wright] via his superb mailing list The Prepared, but he has also been selling an unusual FM radio as Centerline Labs for a few years. Two years ago they relaunched their product, and last year the price was bumped up by a third. Why? Well, the answer involves more than just a hand wave about tariffs.
The Public Radio is a single-station FM radio in a mason jar. It’s a seemingly simple single purpose hardware product. No big mechanical assemblies, no complex packaging, not even any tangential accessories to include. In some sense it’s an archetypically atomic hardware product. So what changed? A normal product is manufactured in bulk, tested and packaged, then stored in a warehouse ready to ship. But TPR is factory programmed to a specific radio station, so unless Centerline wanted one SKU for each possible radio station (there are 300) this doesn’t work. The solution was domestic (US) just in time manufacturing. When a customer hits the buy button, a unit is programmed, tested, packed, and shipped.
As with any business, there is a lot more to things than that! The post gives the reader a fascinating look at all the math related to Centerline Labs’ pricing and expenses; in other words, what makes the business tick (or not) including discussion of the pricing tradeoffs between manufacturing different components in Asia. I won’t spoil the logical path that led to the pricing change, go check out the post for more detail on every part.
We love hearing about the cottage hardware world. Got any stories? Drop them in the comments!
Overseas factories can be sort of a mythical topic. News articles remind us that Flex (née Flextronics) employs nearly 200 thousand employees worldwide or that Foxconn is up to nearly a million. It must take an Apple-level of insider knowledge and capital to organize such a behemoth workforce, certainly something well past the level of cottage hardware manufacturing. And the manufacturing floor itself must be a temple to bead blasted aluminum and 20 axis robotic arms gleefully tossing products together. Right?
Well… the reality is a little different. The special sauce turns out to be people who are well trained for the task at hand and it doesn’t require a $1,000,000,000,000 market cap to get there.
[Adam leeb] was recently overseas to help out with the production ramp for one of his products and took a set of fantastic videos that walk us through an archetypical asian factory.
I’ve been to several factories and for me the weirdest part of the archetype is the soul crushing windowless conference room which is where every tour begins. Check out this one on the left. If you ever find yourself in a factory you will also find a room like this. It will have weird snacks and bottles of water and a shiny wood-esque table. It will be your home for many, many more hours than you ever dreamed. It’s actually possible there’s just one conference room in the universe and in the slice of spacetime where you visit it happens to be in your factory.
Ok, less metaphysics. It’s amazing to watch the myriad steps and people involved in taking one product from zero to retail-ready. [adam] gives us a well narrated overview of the steps to go from a single bare board to the fully assembled product. From The Conference Room he travels to The Floor and walks us through rows of operators performing their various tasks. If you’ve been reading for a while you will recognize the pick and place machines, the ovens, and the pogo pin test fixtures. But it’s a treat to go beyond that to see the physical product that houses the boards come together as well.
Check out [adam]’s videos after the break. The first deals with the assembly and test of his product, and the second covers the assembly of the circuit boards inside which is broadly referred to as SMT. Watching the second video you may notice the funny (and typical) contrast between the extremely automated SMT process and everything else.
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.