Making something that has to get into others’ hands involves solving a lot of different problems, many of which have nothing at all to do with actually building the dang things. [Conor Patrick] encountered them when he ran a successful Kickstarter campaign for an open-source USB security key that was not only shipped to backers, but also made available as an ongoing product for sale. There was a lot of manual and tedious work that could have been avoided, and so [Conor] laid out all the things he wishes he had done when first setting up a product line.
If the whole process is a river, then the more “upstream” an issue is, the bigger its potential impact on everything that comes afterwards. One example is the product itself: the simplest and most easily managed product line is one that has only one product with no variations. That not only minimizes errors but makes supply, production, and shipping more straightforward. Striving for a minimum number of products and variations is also an example of something [Conor] didn’t do. In their crowdfunding campaign they offered the SoloKeys USB device — an implementation of the FIDO2 authentication token — as either USB-A or USB-C. There were also two types of key: NFC-capable (for tapping to a smartphone) and USB only. That is four products so far.
Offering keys in an unlocked state for those who want to tamper makes it eight different products. On top of that, they offered color choices which not only adds complexity to production, but also makes it harder to keep track of what everyone ordered. [Conor] also observed that the Kickstarter platform and back end are really not set up like a store, and it is clunky at best to try to offer (and manage) different products and variations from within it.
Another major point is fulfillment and in [Conor]’s opinion, unless the quantities are small, an order fulfillment company is worth partnering with. He says there are a lot of such companies out there, and it can be very time consuming to find the right one, but it will be nothing compared to the time and effort needed to handle, package, address, and ship several hundreds (or thousands!) of orders personally. His team did their own fulfillment for a total of over 2000 units, and found it a long and tedious process filled with hidden costs and challenges.
Developing a product and getting it out there to build a business is really hard. Whether it’s a single person acting alone to push their passion to the public, or a giant corporation with vast resources, everyone has to go through the same basic steps, and everyone needs to screw those steps up in the same way.
The reality is that the whole process needs to involve lots of aspects in order to succeed; small teams fail by not considering or dedicating resources to all of those aspects, and large teams fail by not having enough communication between the teams working on those pieces. But in truth, it’s a balance of many aspects that unlock a chance at a successful product. It’s worth recognizing this balance and seeking it out in your own product development efforts, whether you’re a one-engineer juggernaut or a large, established company.
It may not be every hardware hacker’s dream, but a fair number of us harbor fantasies of thinking up the Next Big Thing and kissing the day job goodbye forever. It’s an understandable dream and a laudable goal, but as they say, a goal is a dream with a plan and a deadline. What’s your plan for turning your project into a marketable product? Chances are good you don’t have one, and if you ever expect to get to your goal you’re going to need one.
Shawn Hymel is an engineer who led several marketing campaigns for Spark Fun and recently shared his thoughts on marketing with attendees of the first-ever KiCon conference in Chicago. He’ll be dropping by the Hack Chat to talk about everything you ever wanted to know about marketing your hardware projects but were afraid to ask.
Click that speech bubble to the right, and you’ll be taken directly to the Hack Chat group on Hackaday.io. You don’t have to wait until Wednesday; join whenever you want and you can see what the community is talking about.
Eleven years ago, the Airbus A380 entered commercial service with Singapore Airlines. In the time since then it has become the queen of the skies. It’s a double-decker airliner, capable of flying 550 passengers eight thousand nautical miles. Some configurations of the A380 included private suites. Some had a shower. This is the epitome of luxury, a dream of flying with long-stemmed glasses, a movie, and a pleasant dream in mid-air.
Now, after the cancellation of A380 orders by Emirates, Airbus has announced it will end production of this massive, massive plane. No, it’s not the last flight of the Concorde, but it is the beginning of the end of an era. The biggest and most impressive planes just aren’t economical; it’s possible to fly three 787s across the globe for a single flight of an A380. The skies won’t fall silent, but soon the A380 will be no more.
Here at Hackaday we are willing to bet that in a universe free of all monetary constraints, many of our readers would leave their day jobs in order to pursue their hardware hobbies full time. Obviously this is only practical for a lucky minority of people (for a wide variety of reasons) but we’re willing to bet that a significant stumbling block is figuring how to do it in the first place. You quit your job, but then what? If more information about starting and sustaining small hardware business’ was available more people would take the plunge to start one. There are software companies with salary transparency but this is only part of the picture and we can’t think of many hardware companies that offer the same. What we really want is to get an image of the entire business end to end; from suppliers to COGS to salary. And we want to see it for hardware.
Years ago the first and second Hackaday Prizes captured an entrant named FarmBot whose goal was to build open source robotic farming equipment to make it easier for anyone to grow their own food. A few successful Kickstarters and years later they’ve been shipped multiple versions of the Genesis and Genesis XL robotic farming system and have a sustainable business! And now they’ve decided to open source their business operations too. Suffice to say, this provides quite an uncommon view into the guts of what makes a small open source hardware business tick. Let’s take a closer look!
There is a wealth of information exposed in the company documentation; it’s as though they took their internal wiki and made it public, which we suppose is exactly what happened. The most interesting part for our readers might be the statistics page that tracks costs and quantities for their products. This is where the magic lives. You can use to it see that so far they’ve sold 124 Genesis XL machines at an average selling price of $3,834.34 for $475,458.30 of revenue (it cost $187,200 to build their run of 200 machines). You can also see that each machine has 1,415 parts and takes about 25 hours to assemble. This page is where the true guts of the business live.
Everything else is here too. Here’s where you can learn about what vendors FarmBot uses use logistics, or power, or web infrastructure monitoring. And this is the page with the infamous salary calculation formulas if you want to guess what you’d make as an employee. Then there’s a bunch of boring but important stuff. Fulfillment processes live here, and the consumables they use to support that fulfillment are listed here (with costs!).
One reason we enjoy open source so much is that it affords a wonderful opportunity for people to learn instead of keeping the important parts of a product or process perpetually under wraps. We’re hoping that documentation like this becomes more prevalent and foster an explosion of small hardware companies to follow it.
Just to be clear, the primary goal of the Papas Inventeurs (Inventor Dads) was to have the kids make something, have fun, and learn. In that light, they enjoyed a huge success. Four children designed, made, and sold laser-cut napkin rings from a booth at the Ottawa Maker Faire as a fun learning process (English translation, original link in French.) [pepelepoisson] documented the entire thing from beginning to end with plenty of photos. Things started at proof of concept, then design brainstorming, prototyping, manufacture, booth design, and finally sales. While adults were involved, every step was done by the kids themselves.
It all began when the kids were taken to a local fab lab at the École Polytechnique and made some laser-cut napkin holders from plywood for personal use. Later, they decided to design, manufacture, and sell them at the Ottawa Maker Faire. Money for the plywood came from piggy banks, 23 different designs made the cut, and a total of 103 rings were made. A display board and signs made from reclaimed materials rounded out the whole set.
In the end, about 20% of people who visited and showed interest made a purchase, and 60 of the 103 pieces were sold for a profit of $126. Of course, the whole process also involved about 100 hours of combined work between the kids and parents and use of a laser cutter, so it’s not exactly a recipe for easy wealth. But it was an incredibly enriching experience, at least figuratively, for everyone involved.
“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.