When I quit working at the social network my brother had founded in Spain in 2005, it had grown into 10 million active users and a team of 300. We’d seen everything at Tuenti: massive user growth, recurring scalability nightmares, fundraising kicks, monetization, and everything else you get when you compete on the Internet. But when I decided to leave Tuenti last year to focus on my own venture, it wasn’t for a Web startup. Another industry had caught my eye: physical technology goods.
Crowdfunding platforms and their famous million-dollar projects have set the stage for a new breed of startup. But I was surprised to find that my knowledge of the “lean startup” model from working in software turned out to be surprisingly useful when modified to suit hardware. Some of the jargon does change, and the steps are different. Users become sales; bugs are fixed through CNC milling and material science; the “platforms” you rely on are injection-molding houses and shipping fulfillment centers. But the skills are largely transferrable; you just have to learn how to apply them and play by Kickstarter's new rules for hardware startups. Here’s how to apply your software knowledge to building a physical gadget.
Like many websites and services out there, we started by identifying a problem that needed fixing. In our case, it was our smartphones not lasting us through the afternoon.
Problem in hand, we went to the proverbial drawing board. None of us had any experience in real world manufacturing, but that didn't stop us from moving forward, and nor should it stop you. Just as we used to do at Tuenti when we were in the early stages of developing a new chat or photo-sharing product, we began sketching out and mocking up designs for a real device that we planned to somehow mass produce.
The only way to do this right is to get a notebook and brainstorm. Sit down with friends and colleagues and get creative. Don’t be bound by your own technical capabilities; if part of the product you want to create requires skills you don't have, then you're probably venturing into something good. Pretend you have a team that will figure that stuff out, because you'll have to throw one together anyway soon enough.
I began throwing around the idea of a super small USB cable that you'd tape to the back of your phone. I started pushing it around to friends and colleagues. One guy in the mobile department of Tuenti worked with SIM cards and told me that if I made one the shape of a credit card, the way SIM cards are packaged, it would stow naturally in people's wallets. I laughed the idea off, went home, realized he was right and redesigned it.
We transformed our notebook drawings into 3D CAD mockups. Then we began playing around with simple rubber cutouts and created horrendous looking but functional prototypes.
Rough homemade prototypes can help people wrap their heads around the idea. They also get people to respond to you as someone who's really doing something; that creates a positive feedback cycle that will help build momentum in your team. And you'll need a lot of momentum to surmount the challenges of product creation.
We immediately started showing our CAD drawings to friends and family. We noticed their attitudes change; they got curious. For us, the renderings gave us a lot of momentum and made us feel as though we might be on to something.
Then we went through an informal validation phase. Would it really fit in in our wallets? Would we really always have it with us? And, most important, would we really need it? Yes on all accounts. In fact, the more progress we made, the more we realized how considerable the problem was that we were aiming to solve.
Don’t get discouraged if you can’t prototype your idea in your kitchen. If you have to build big, build big. But if you're resourceful enough to make your own prototype, then you'll know for sure that you’re resourceful enough to take your product to market. In our case, ChargeCard is tiny and our prototypes only required us to build some simple homemade molds for use with some DIY urethane casting resins.
Next, begin exploring the manufacturing feasibility of your product. Call 20 different companiesthat could help manufacture your product. If you're already this far along with your idea, you'll have enough fodder for some free 30-minute telephone conversations in which you'll learn a lot about the costs, techniques, and lead times for going into production. This process is critical for you to gain enough information to throw together a thorough and genuine crowdfunding campaign, one that will demonstrate your preparedness for executing on production and delivery. Find out what your costs are likely to be, then double them and try to raise twice your goal.
One word of caution: attempt to really tease out the details when you're talking about procedures and timelines with your manufacturer, if you're not experienced in producing physical objects. I regret not having worked through our manufacturing schedule in more detail so we could have set a more realistic timeframe. What is said to take five weeks often takes 10. That's just the way the world works, and it's OK. Just give yourself and your crowdfunded backers (or other financiers) a sizable time buffer, since you'll certainly need it.
At this point we began pushing around the idea of using a 3-D printer to make final form nonfunctioning prototypes. I had read an article in The Economist a year earlier about advances in 3-D printing, and I figured that maybe the technology had improved and come down in price. It had.
After some Googling, we learned of an Israeli-made 3-D printer called the Connex 500 that can print with two materials. This was key as most 3-D printers only use one material, limiting the range of applications. By printing with two materials, the Connex 500 offered a continuum of shore durometer, aka the hardness of the materials it could print. By printing with one hard plastic material and one rubbery, more silicone-like material, we could blend the two together to get any desired degree of rigidity or flexibility. And this was perfect for us, as fundamental to our final ChargeCard design is a middle foldout USB plug which requires the elastomer properties of the rubbery printing material. (Below, the Connex 500’s printer head.)
So we set out on a wild Connex 500 chase and found two printing houses in Southern California that owned them. At a couple hundred thousand dollars, they’re not your average Maker-Bot. We blindly asked for quotes as we crossed our fingers. The final cost to print four final-form-factor prototypes? Less than $200.
Meanwhile, as you continue your conversations with the manufacturer, be transparent that you're crowdfunding. At the end of the day, you'll need to find partners who believe in your product and your vision and are willing to take some risk. Try to reach favorable net payment terms that allow you to defer payments so you can make accelerated, aggressive moves.
Our prototypes were ready within a week, and they were beautiful. Three or so months into development, and our total project costs to date hadn’t even reached $1,000. We had living costs, of course, but we were still working part-time jobs to cover those.
Deciding what exactly you’re going to source out requires you to know your company’s own core competencies. Decide on and define your domain and contract out the rest.
And the buck doesn’t stop in just working with a contract manufacturer. Amazon and its competitors offer similar scale-up solutions for physical goods startups, almost like EC2 for shipping and fulfillment services. Using Amazon allows you to scale easily and affordably scale up product sales so you don’t have to worry about inventory and shipping. Remember, just as most Web startups aren’t trying to be scaled server centers, you’re not a shipping and fulfilling center: You’re a product designer and developer.
Once we had gotten this far, we worked with our injection molder in finalizing the production methods, which admittedly required much more adjusting and engineering than we had anticipated. (Above, a version for Android devices next to a credit card.) These methods were ultimately reviewed several times back and forth by the toolmakers until we’d worked out the kinks and they were ready to cut steel for the molds.
In hardware, you rely heavily on the tools and skill sets of the manufacturing partners you contract with, so lead times are inevitably longer than in the software world. But sourcing out manufacturing also allows you, the developer or designer, to focus on what you do best, which is presumably developing and designing physical products.
We spent $500 building a billboard trailer with a mattress inside. Then we went on a three-week grassroots ChargeCard tour in an attempt to independently meet our funding goal in case our online marketing efforts didn't work.
We had made it from Los Angeles to Denver when we finally realized that our online efforts--which we were still doing about 10 hours a day--were much better at garnering press. Still, our aborted trip was crucial. Having to pitch our product over a thousand times really helped narrow it down to one sentence. Now I know to tell people that ChargeCard is "the white USB cable for your iPhone, in the shape and size of a credit card."
When you're pitching to thousands of people, turn up the power on your negativity filter. It takes a lot of will power to deal with all of the naysaying out there. You’re going to run into people who shut down your ideas and try to spoil plans out of their own fear or cynicism. Humans are naturally risk averse, an important trait that got us through the pre-agricultural hunter-gatherer days. Those days are over. With an attitude of resourcefulness, fearlessness, positivity, and resiliency, nothing will stop you.
We began talking to media two months before we were ready to launch on Kickstarter. In the weeks before our Kickstarter launch, we arranged a splash of blogposts including an exclusive.
Get press, more press, and try some guerrilla marketing to get even more press. This coverage is free, after all, but you'll have to work for it. It's not an option to ignore the blog circuit if you're serious about crowdfunding, since you'll need help getting the word out. There's an ocean's worth of blogs looking for neat new products to cover. Build relationships early so they'll remember you when you want to be published weeks or months later. You're not asking them for a favor--you're providing them with fresh content to share with their readers, so tell the whole behind-the-scenes story of your project and make it as compelling as you can. In other words, make the story a win-win.
Go global. Reach far and wide. Approach media from different industries--perhaps a home-living blog would be interested in covering your gadget even though they usually don't write about tech. We kept up with the press push for five weeks and remained indiscriminate in who we thought might be interested in covering us. One day we would be all over the Dutch press and the next day we were on Thai blogs. The Netherlands is one-twenty-fifth the size of the U.S., but one day over half of our presales came from there. The world is big, so reach far and wide, and you may be surprised which demographic is going to love your product most.
When it came time to build our Kickstarter campaign, we didn’t actually have a product yet, just a concept and some prototypes. And that’s where the beauty of the crowdfunded model came in. In the two months after our prototypes had been made, we prepared a rough manufacturing plan, established partners with tooling and injection molding houses and wrapped everything together in a presentation and video.
We spent a week making the video. With a $100 skateboard-size camera dolly, some Youtube how-to videos, a $14 license for music from audiojungle.com, a borrowed SLR, and a free trial from Adobe, we had all the tools we needed to make a professional-looking video.
This shouldn't be the first time you pick up a camera during the process. In fact, you should be documenting everything, so that you can use it to piece together the story of your project later for contributors and customers to see. The better they know your struggle, the more likely they are to plunk down money for what you've built.
Forty frenzied days after the ideation began, we had raised more than 300 percent of our $50,000 goal.
Be transparent with your backers. We’ve been updating everyone on our progress, and for the most part, they've been overwhelmingly supportive. We just shot our first production level ChargeCards last month, and we’ve just begun mass production a few weeks ago with a 15,000-unit run.
Like many other Kickstarter product-design projects, we were late to production. It's harder to anticipate lead times in advance when it's your first go, so prepare by getting multiple manufacturing quotes. Having multiple quotes in advance will help you better understand the nuances of your timeframe and help you prepare a more accurate one. After all their patience and generosity, our backers began receiving their brand-new ChargeCards this month. Happy Kickstarting!
Noah Dentzel graduated from Dartmouth College in 2010, then worked for Spanish social network Tuenti as a product manger before founding Zeller Design in early 2012. Their first product is ChargeCard. Noah's focus is on user experience, interaction design, and building tools that make life easier. In his free time Noah is an avid slack liner, beginner rock climber, and sixth-generation carousel carver.