Ask HN: How does one go about bringing a hardware product to market?
How does one go from an idea to a sellable product?
I have various ideas, not especially "high tech" more assembling of off the shelf components to create novel products that I think may be useful (I have a need for these myself). So I could build a prototype myself (despite being a software person). After that what? How do you find out about manufacturing costs and options? Marketing is another side, but I have an idea about that.
Are there any good guides out there?
84 comments
[ 2.6 ms ] story [ 159 ms ] threadThrough their posts, you can make an idea on how complex and how much work there is on developing, manufacturing, certifying and delivering a hardware device.
Link: https://blog.flipperzero.one/
https://www.kickstarter.com/projects/keyboardio/the-model-01...
They went through hell to get it manufactured. Shady companies, the whole nine yards!
[0]https://techpod.content.town/episodes/97-how-to-survive-the-...
We're generally pretty happy to chat with first-time hardware founders. Feel free to drop me a note at jesse@keyboard.io.
I have only recently joined YC Startup School and hope that I will be able to make some suitable connections. If you'd like to connect, please take a look at my HN profile page.
Once you're at the point you can't fulfill all your orders just with prototypes, you can start thinking about scaling. At this point you will have much more experience. It's also possible to outsource quite a bit of the whole design. It's quite possible to mostly do software despite selling hardware.
It has been pretty fascinating for me in comparison to al the digital product stuff I'm used to.
I've never found a good guide on how to get started in hardware or eCommerce, but I've been posting yearly[2], monthly[3], and weekly[4] updates about my experience learning as I go.
One thing I wish I knew at the beginning: it's difficult! Scaling a hardware product is probably 10-100x harder than scaling a software product. There's nothing like GCP or AWS that scales from one to thousands. Vendors that offer fulfillment services won't work with you when you're only selling tens to hundreds per month, so you have to do everything yourself. I built my own fulfillment center[5] and hired people to staff it, and that's complicated because that gets into inventory management, employee payroll and benefits, insurance, etc.
The difficulty is a double-edged sword, though. It prevents people from competing with you because nobody else wants the hassle. But the downside is that you're the one who has to deal with the difficulty.
[0] https://news.ycombinator.com/item?id=23927380
[1] https://tinypilotkvm.com/
[2] https://mtlynch.io/solo-developer-year-4/
[3] https://mtlynch.io/retrospectives/
[4] https://whatgotdone.com/michael/project/tinypilot
[5] https://mtlynch.io/retrospectives/2021/05/
Consider reading this book:
https://www.amazon.com/Sell-Margins-Higher-Than-Competitors/...
I would really consider raising your prices. I found that when I first started my business, I had a subconscious desire to replicate my income at my previous job, which caused me to irrationally underprice my products. After 2 years, I got over it, and it transformed my life. You've done an amazing amount of work. You should get paid for it (or, if people won't pay for it, get out). My dad used to say, "I don't do work for practice."
Thanks for reading!
No, that doesn't include paying myself. But it's also worth mentioning I also had $59k in raw materials at year-end. If I had to liquidate everything, it would cost about $5k to assemble the raw materials into ~$200k of product and ship them to customers, so I'd theoretically walk away with $195k.
I've always had a hard time assessing the financial health of the business because I'm investing a lot into future growth. Because of the supply shortage, I have to stockpile a lot more raw materials, so as sales grow, I'm also buying more materials to meet the new scale. And a lot of my costs are one-time events that I expect to pay dividends over time (e.g., hiring EE vendors to design a new product, hiring a design firm to overhaul the website, paying developers to add features).
>I would really consider raising your prices. I found that when I first started my business, I had a subconscious desire to replicate my income at my previous job, which caused me to irrationally underprice my products. After 2 years, I got over it, and it transformed my life. You've done an amazing amount of work. You should get paid for it (or, if people won't pay for it, get out). My dad used to say, "I don't do work for practice."
Thanks! This is something I have trouble with because it's hard for me to measure the optimal price. My volumes are too small to really A/B test different prices effectively. Over the course of the business, I keep raising the $50 thinking the new price is crazy, and then people continue buying anyway.
Yes! It is your business, and you know best, but this sounds promising to me and reminds me of my situation. That is why I recommend that book. It argues compellingly that you want to sell less at higher margins, all things being equal. That gave me the courage to raise prices, and I ended up selling just the same/more at higher margins. Raising prices takes courage, and clearly there is some point where you go too far, but it's worth really pushing yourself emotionally to consider it early in the business. If I had not radically altered my pricing 15 years ago (15 years of massively higher income potential and counting! crazy) my life would be so different than it is now.
Rather than thinking of A/B testing, I would try to think of how much value your product adds for your customers, and then capture some reasonable percentage of that. Think of it very broadly (again, see the book). There is more value here than just the hardware/software. Your customers may value dealing with you instead of dell, etc. Try talking to some good customers about how much they would really pay. Some won't feel comfortable, but others may blurt out "we spent $3k on your hardware last year, and the truth is it's a rounding error for us. We just want someone who delivers a solution and answers the phone in person (or whatever)"
Anyway, I wish you the best of luck. After writing my original comment, I realized you had only been operating for 18 months. That, combined with your inventory assessment (I am in software, and have no inventory, so I didn't think of it), seems very promising!
Especially:
1. The Complete Guide to Building Hardware Startup Teams
2. The Illustrated Guide to Product Development
Not sure if he is still writing at Eclipse
Don't forget this is the supply chain crisis era, so you need to make sure you can get 1,000 units of all your parts that are actually in stock and not on 24 month back order.
The other comment that says "Scaling a hardware product is probably 10-100x harder than scaling a software product" is absolutely correct.
Once you have a prototype you can Kickstarter, but a lot of hardware kickstarter projects fail. https://help.kickstarter.com/hc/en-us/articles/115005134554-...
Step 2: you need to be either a very fast learner across a lot of subjects, while spending your own money, or hire some consultants who know what they are doing. I used to work for a product development consultancy, but it's a pretty niche market.
This includes minefields like UL and CE certification.
Step 3: you need to either pick "local" manufacturing, where you can build up a working relationship and they will genuinely help you, or "remote" manufacturing which costs less but you have to diagnose all the problems over the phone or get on a plane to them. The latter is much harder in the COVID era.
Step 4: assembly, shipping, taxes, payment, etc; some of the local firms will also handle this for you (and take a cut).
Would it possible to learn this stuff by getting a job in one of these consultancies somehow? And if so, how might one go about doing this?
Here's one of the better-known ones in my area: https://www.linkedin.com/company/logic-pd/
I have remembered about Bunnie Huang though, who wrote a book on the subject: https://www.crowdsupply.com/sutajio-kosagi/the-essential-gui...
He blogged extensively about the "chumby" product he did about a decade ago, and the "precursor" he's working on at the moment. https://www.bunniestudios.com/blog/?cat=6
I can't speak for all firms but the way we find our employees is through networks of current employees and through LinkedIn recruiting. You'll want to emphasize aspects of your resume/work that mark you as a self-starting generalist with key skills.
An example on the generalist side: we had a candidate say, "I don't want to do design, I just want to be handed a schematic and do PCB layout." They were passed over in favor of another candidate willing to dive in and do schematic capture if necessary, PCB layout, and speak directly to customers about requirements, timelines, budgets, and other project planning logistics.
An example on the key skills side: the weakness of generalists is of course lack of depth, and we'll often contract out to SMEs based on project needs. If you know of a product consultancy near you that's, say, mechanically-focused, you can offer e.g. SWE expertise on, for example, frontend/backend development for a site that accepts RESTful HTTP requests from the IoT device they're building a mechanical enclosure for, whose customer needs software expertise that the MEs don't have.
To find these companies, useful search phrases are things like "product development", "contract engineering", "engineering consultancy" and so on.
Or go work for a company that makes products. You will learn a whole lot of things about bringing a product to production that you will not learn at pretty much any product development consultancy.
Note that right now in 2022 just about everyone is desperate for help. Be sure you like doing parts substitutions.
I've hired layout shops where we worked with the designer more or less directly but at "whole product" design shops, if they even have a layout designer, in my limited experience it's not usually a customer facing position.
5. Unless you've got very specialized instrumentation, the power supply and case will dominate your costs. Per step 2 above, these will also dominate your timeline if you include an internal power supply.
6. FCC certification is also probably needed if your device is consumer oriented.
7. Expect development, time to first article, etc to be much slower. In my day, we couldn't have customers update their Flash-based firmware so we had to guarantee the hardware was perfect AND that the firmware was perfect. In your day, you still have to make sure the hardware is perfect and the reality is that very few of your customers will ever update the firmware (so it has to be perfect with each version.
8. For a small business, hardware returns are not only painful but have real costs. A recall will put you out-of-business (and if you're not careful with your corporate structure could put you into personal bankruptcy.)
6A. Most products with a microcontroller will need verification that they are compliant with FCC regulations on unintentional radiators. That's relatively cheap to do. If you bought your power supply (see 5) you are probably compliant. The problem is... by the time you get to this point, you are behind schedule, money is getting tight, and any respin or even adding ferrites is going to be a huge headache. Also, what got you here... might not help you solve an EMC problem. Good luck!
6B. If you need a transmitter (i.e. bluetooth or WiFi): for low volumes, if you possibly can buy a prequalified module, do so. Then certification is just paperwork at most. But don't listen to me, do a chip-down design because your industrial design requires it. YOLO and there is no other way to learn. 2.4 GHz at WiFi SoC powers is pretty forgiving. BLE with its low duty cycle practically handles compliance for you. Buy your matching networks and filters and don't go crazy with your antenna design
7. In general expect to be surprised by how the engineering - hardware, software, mechanical, etc - involved is much more exacting and demanding than you might expect from say, how conceptually difficult your problem domain might be. Especially if you are a software engineer and haven't worked with physical products
8. See #7 - you should be doing everything you can in design and procurement to minimize customer issues, from UX to field failures to any abuse of the product you can reasonably imagine. (Misuse you can anticipate has product liability ramifications also) If you are building 1000 units, any returns are going to cut into your margins. Look up typical warranty return rates for your industry and work that into your business plan and your pricing
9. They will all tell you hardware takes 10x-100x longer than software (I think this is a software engineering perspective where they expect to be able to deploy from a schematic or something), but then they will also tell you that if firmware isn't making you late, you aren't getting enough value out of firmware. You figure it out
Your options for a case are to go full-custom, which is expensive in small volumes, or to go semi-custom, which involves buying a case and having holes machined, which is expensive.
With power supplies, you probably should buy off-the-shelf, and in small quantities that is going to be relatively expensive.
I've never seen the case and power supply dominate costs on any of the designs I've shipped, though. The poster might have very particular power requirements.
Some folks also get hung up on how much cable harnesses and connectors cost. I think it's because they conceptualize the design in their mind without them.
An interesting corrolary to this point is that somewhat counterintuitively it is often easier to aim for the highest segment of the market you target with a niche product than for broad appeal.
Having a very high markup and selling price means that even small batch become feasible. Sourcing for high quality part sellers generally means you will have less issue with quality control. Selling less means shipping and inventory management is simpler. Marketing is easier because your customer base is more narrow. As a bonus, high margins give you more leeway to make mistakes.
But a lot of the world makes (or peices together) fewer, higher budget products/projects and sells them to more focused markets (boutique hotels, regional CVBs, breweries, etc).
This is a point that usually gets lost in these discussions. The type of market makes a huge difference. My "side businesses" have always targeted B2B or niche B2C services and I have a lot of experience doing that. Businesses are far less price-conscious than individuals.
However, I also worked for a company making consumer wearable hardware and the approaches you have to take, along with the minimum viable volumes are night and day. Also, consumer products tend to require certification testing that industrial ones don't.
1) build any kind of prototype 2) Go to Shenzhen, China and find a manufacturer / partner.
Never trust someone that you don't have a good working relationship with to keep your IP safe.
There was a selfie stick phone case Kickstarter where you could purchase Chinese clones on Amazon before the original project finished funding.
1) successfully crowdfund a hardware concept
2) Wait for the productionized version of that concept to show up on AliExpress for 10% of the unit cost if you manufactured yourself
3) Buy a few pallets off AliExpress, ship them to your backers.
1) Design it wrong 2) Wait for knock-offs with improvements 3) Buy those
You can outcompete them on customer service, community, brand, and quality.
For most consumerish products, I would not be worried about a clone stealing your design files. It is incredibly cheap to clone the mechanical parts of a product from photos or a single copy bought retail. For most consumer electronics, the clones would be unlikely to use the expensive western parts and designs you would. Instead, you're likely to see really fascinating cost engineering around parts you didn't know existed.
[1] I have sued a supplier in China, who did some sketchy stuff. It was a fascinating process. Contrary to the conventional wisdom and to our expectations, the court actually helped us get back our tooling and inventory.
It's obviously a bit of a 'spectrum', but I'd say a 'real' hardware startup would be one that develops new hardware, like Tesla, General Fusion, a robotics company, etc - really anything where the innovation is in the hardware, and if software is developed (usually will be) then it sits on top of that novel hardware. Let's call this case 'hardware-heavy'.
In the hardware-lite case, you're basically starting a software company that needs to set up a supply chain for a few parts, built by others, which provides the most cost-effective platform for your software to run on. You might then package that up, brand it, and sell it. This can be relatively capital nonintensive.
In the hardware-heavy case, you'll probably need quite a lot of capital. This will be needed for you to patent your invention(s), prototype your devices repeatedly until you've arrived at something commercially viable, set up a small batch manufacturing process to produce small volumes of prototypes. With hardware, when you ship something anyone can take it apart and reverse engineer it. Every time you replicate your product, it takes time and money - unlike software.
Tons of commenters here will be able to give you excellent advice about the hardware-lite model, because this is HN. I suspect there is less experience of hardware-heavy business models here.
Which fits your vision?
True to a point.
Beware that even if you're putting your software on to someone else's hardware, it is ultimately you who becomes the "manufacturer" in the eyes of the consumer and the law.
So if your batch of Widgets that you bought from XYZ suddenly start setting fire to people's houses, that falls on your doorstep (yes you may have an upstream claim against the actual OEM, but it is you who will be responsible to the end users).
Similarly if you're getting involved in safety critical stuff, then buying OEM hardware will only take you so far. Regulatory approval for the final package will still be on your watch and your tab.
There is quite clearly a difference between selling 100 items that are designed to be simple enough for you to manufacture in your garage, to selling 10,000 items which require injection moulding, custom PCBs long assembly steps, finishing, QC/testing, certification etc, are clearly two completely different challenges.
But the first step is to build a prototype that people want, and then think about how you can make it easy for yourself to assemble (because chances are that will also make it easier for someone else to assemble).
If it's not an intentional radiator, you can get multiple rounds of FCC+CE testing for USD650 in Shenzhen these days.
I would also recommend that you join any local Hackerspaces in your area if you need access to special equipment: laser cutters, CNC machines, 3d printers. Peeps who frequent these spaces are very knowledgable and surprisingly helpful with n00bs.
As others have already mentioned here, don't worry about going into production for now because A LOT of stuff is in flux due to the pandemic. Most people who are serious about building hardware either end up moving to Shenzhen or spending a huge chunk out of their year supervising the manufacturing in person. If you are not ready to make this commitment yet then it's better to focus on making your prototypes locally with what you already have on hand.
Keep in mind that prototyping is completely different from design-for-manufacturability (DFM), which is its own engineering discipline.
You’ve got to become an ad-hoc subject matter expert in many different areas, or be able to find and hire those people. This is everything from electrical, RF, design for manufacturing, mold design, packaging, logistics etc.
In my experience finding a manufacturing partner is a challenge, big ones are usually not interested in a low volume product taking up their assembly line space. They’ll usually want some contractual guarantees about the number of units and it’s going to make your eyes bulge the first time you see it.
Call a lot of people, ask a lot of questions, and get introductions from every possible person you can. A lot of manufacturing is old school business and relies on past experience and transitive trust to start a relationship.
I really loved the challenge, but this kind of thing is not something to step into lightly.
- Be prepared to spend 18 months bringing even the most trivial product to market.
- You find out literally everything having to do with manufacturing by talking to manufacturers. Start Googling, calling and emailing.
- B2B bares almost no resemblance to B2C. No one will respond to your emails. Almost no manufacturers will want your business. Even if you are buying components that require customization with cash, they still won't want your business. All you can do is keep annoying them until you find a salesperson that takes pity on you. I was able to get a key component for my first product made because I happened to find a brand new salesman that needed something to do.
- Don't worry about building the thing right until you are very, very sure you are building the right thing. Failure to do so will result in wasting of at least $10K. Spend at least $2K validating any product idea (landing pages, Facebook ads, product renderings, product video). Spending $2K to kill a bad idea you would have wasted $10K on later is good ROI.
- Be as public about building your prototype as you can be. Get involved in communities of people, wherever you find them, that you think would be your customers and post there. If they feel invested in what you built, they will like you and maybe buy it. If you show up after it is done and try to sell it to them, they will hate you. If no one in these communities seems interested as you're prototyping it, then absolutely no one outside of the community will want to buy it.
- Don't start trying to produce the finished product until people are begging you to sell it to them. I am not exaggerating when I use the word begging. If someone tells you they would buy it if it was available, they probably won't. If that person is your friend or family, they are likely lying to you because they don't want to hurt your feelings.
- Do not, under any circumstances, think you can pay someone you've never met to solve a problem for you. (See other comments about you needing to become an expert in everything.) They will to a horrendous job and charge a fortune. If you find a person you can trust, hold on to them like a hungry octopus.
- You need to have customers waiting when you first ship. Build a pre-sales mailing list. There are countless blog posts on how to do it so I won't rehash it here.
The difference that most shocked me is just how unmotivated manufacturers and resellers will be to get your business. You have to audition, and sometimes plead, to give them money. The reason is because the cost of taking on a customer for hardware can be very high. This is much less true for software.
The remaining hurdle appears to be CE certification (or FCC if you're in the US). I know of some competitors that are doing similar things to me without CE, but I am really not comfortable doing it this way. While self-certifying for CE is doable it does not appear easy and if you screw it up it sounds like you can get in a lot of trouble. I'm still not sure about the best path forward but am likely to do my best with self-certification and set up a LLC in case things go awry.
If anyone has any tips regarding certification specifically please do share.
The second tip if for some reason you have to certify yourself is that when it comes to bureaucratic processes that you don’t want to get wrong and that you aren’t super familiar with I’ve had a lot of luck with finding people on Upwork or Fiverr that specialize in that particular process.
A) How can I trust that my supplier actually did the right tests? Do I just trust that they follow whatever spec (that passes CE) Espressif gave them and that's enough?
B) From what I've read, if all the components you use to build an electronic device are CE approved, that doesn't mean that your device is. This seems to be boiled down to as "CE + CE != CE" a lot of the time I've seen it. Is it wrong?
Fiverr/Upwork is definitely not something I've considered. Will give these a try.
For B, yes, you are correct, but my understanding is that as long as you don’t have any other “intentional” emitters (for example Wifi or BLE) you only need the unintentional if your device is battery powered or uses a certified power supply. Then it should be quite cheap and simpler to get the full certification (think $500-$1000 instead of an order of magnitude more)
This is a very important point. It is not unknown for products to have completely fake certifications including a fake lab report and fake certificates. What you need to do is ask for certification report and certification certificate. These documents will show the testing lab. It should be accredited to do the test. You need to contact the claimed testing lab and quote the approval number and check all the approval details match . ie the company, product is correct. Could also get a test lab of your choice to review the accreditation documents and product to verify them ( not retesting) just review to check accreditation.
According to his experience the hardest requirements were about high voltage and electromagnetic interference (both how your device interferes with others, and how others affect yours). He also had mechanical requirements but that was fairly easy to test himself.
He was able to design his device to not use any high voltage. Basically buy the power supply off the shelf and don't enclose it in your product.
For EMI, it's hard and expensive. Specialized companies will test and certify your device, but this is too expensive. He found a laboratory in a local university for a reasonable price who was able to help design, define some minimum testing to reasonably ensure compliance without breaking the bank, and realize the tests. It was long and a significant budget.
A lot of his BOM are components from China. His conclusion is that you cannot trust in any way their CE marking. Some pass, others don't. They are all marked. You need to test yourself.
For low volume "artisanal" products, it looks like a lot of people just don't perform rigorous (professional) tests, they just test whatever they at home, mark it and hope they never get into trouble.
yeah, that's tricky. Testing whether an ESP32 complies with CE sounds very difficult and pricy. I suppose if they are bought in the EU though that it's up to the supplier that you buy it from to make sure it's CE compliant.
> For EMI, it's hard and expensive. Specialized companies will test and certify your device, but this is too expensive.
Yeah, I actually did find a UK-based test lab that does it more cheaply. Indeed I planned to send my device there and mainly just verify EMI for CE conformance of my device. It's good to get some confirmation that this is the main test required.
One advice concerning EMI is that it's one thing to certify the finished design, but it's tricky to design it right if you're not experienced with EMI. Before testing it's worth having some advice and design review with the specialists to see if they think the tests will pass and how to improve it.
The podcast episode is at: https://runninginproduction.com/podcast/105-tinypilotkvm-let...
It covers everything from how he got started, starting with a proof of concept, 3D printing and refining the process as he went.
When you have a prototype, don't go to a trade show and display it without reviewing UC/FCC labeling guidelines. We were across the isle from a major modem company and the inspector came by, picked up a display prototype and it was unlabeled.
They got a $10 or $20K fine right there.
> Prototype to Product: A Practical Guide for Getting to Market
Highly recommend it
After we built our prototype we hired a local machinist to make a "mold" that would produce higher quality (sellable) examples.
We then made (and sold) those in our basement for months, until we had enough traction to hire a CAD designer to make a CAD file for the purpose of finding a manufacturer.
We started cold calling local manufacturers in the US and were basically told to "f*ck off" as we were too small.
We finally got a lead by contacting another business with a "similar" product (or at least process). They referred us to their manufacturer in China, and we jumped on it.
We ordered generic samples of similar products they make and were happy. We then had samples made (after paying for the "mold" to be machined) and those looked good (we lucked out) and then finally ordered our first 750, and then subsequently higher quantities.
We then had another business owner who had experience with importing help us with customs/importing etc.
Ask for help! Find other small biz owners, they're usually eager to assist.
I don't know if I can advertise other startup accelerators here, but there is at least one startup accelerator that involves companies with manufactured products. I participated in this program, and they work closely with participating companies on this process. The accelerator is also very well connected, which could help with your marketing thing too.