A couple of weeks ago, I had the pleasure of attending and speaking at Xconomy’s Xsite 2013 at Babson College (co-hosted by Olin College). I participated on the “Hardware/Manufacturing Track: New Era of Design” panel where one of the premises was the idea that it’s almost as easy to get hardware to market as software – if you know what you’re doing. I thoroughly enjoyed the subject, as it’s something I talk about every day. It is now absolutely easier than ever before to go from an idea to a prototype because of the tools and technology that have been made so readily available to entrepreneurs (3D Printing, Arduino, Github, GrabCad, access to capital, etc). But the challenges remain the same when going from one (prototype stage) to many (high volume manufacturing/scaling).
There are fundamentally different factors that affect scaling hardware vs. software. In hardware there are tolerances, batches, inventory, lead-times, capital expenses and many other factors to deal with. Many entrepreneurs have not worked at established hardware companies, and in turn do not have as much specific experience or visibility to the challenges and processes. Of course this lack of experience in one area brings a wealth of opportunity in the form of fresh thinking. It is critical to have a strong working knowledge of:
- Fundamental financials of production (COGS, Tooling, Manufacturing costs)
- Factory Selection and Management
- Schedule and Project Management
- Manufacturing Network
- Factory Communications
One of the most significant recent innovations that is helping hardware entrepreneurs is crowdfunding, making it possible for an entrepreneur to test the market with a prototype before getting as deeply involved with the details of scaling. Even though it is much easier to get to a functional prototype, manufacturing at scale is complex and it is still critical to understand the the items listed above. Otherwise, you may get funded and be unable to deliver on the promise.
At the end of the day? Hardware is still hard.