Thanksgivukkah and Lean Hardware Startup

THANKSGIVUKKAH
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During the holiday break I found this post on TechCrunch that then lead me to this post.  Before I go on about these two posts from TechCrunch, happy Thanksgivukkah to those that celebrate Thanksgiving and Hanukkah. This year both holidays happened at the same time. This will not happen again for several thousand years.I hope you enjoyed the convergence. Now back to the posts. I struggle with how to communicate the hardware development process better to startups I talk to. The way I do it is through a sort of lean approach. There is Lean Startup and now there is Lean Hardware. We use these terms too when we describe the process. Our process is very similar to what is stated in the post, but we emphasize DFM throughout the entire process. Right from the start we think of DFM, we do not wait. We integrate it in as the processes are happening at the same time, in real time. Very much like the Thanksgivukkah Holiday convergence. We also iterate on the problem, communicating with the client throughout the process. Each step may need feedback and may need to explain why a feature may cost differently than another. Usually our clients have a price point in mine or price is not the overriding factor.  Quality is. Their target market has requirements.  Integrating in DFM is essential for saving time and money. Also while encouraging quality of materials and design.

My favorite quotes from the post are: “No hardware plan survives contact with a factory” and “Your factory is your most important partner”

The factory is truly a partner in the product development process. Do not treat them as a vendor. I can not say this enough. Yes, I think vendor is a dirty word. It describes a relationship that is distant and adversarial. The other day I was talking with a new prospective client. He was telling me how he hired someone to visit China, to visit factories and get quotes for his product. The product was not even ready to be quoted. It was not in the third stage of prototyping, it was in the second stage so the product was not in a finalized form. The BOM (Bill of Materials) was still changing. Not ready.

Three stages of prototyping
Stage 1-Ugly prototype: Just get it to work (MVP)
Stage 2-Design and Materials prototype
Stage 3-Finalized product design that is used to Design the Supply Chain (DSC) and the finalized BOM

So what happens when you go out and try to price a continuing changing target, you keep coming back asking for more information. This wastes both your time and the factories time. At the end, the factory will not want to deal with you. Or if they take you on you will not be on the top of the list of priority customers. We have seen this happen many times. The factory will get frustrated with the continued 20 questions game. Think of it this way, your product is not the only one the factory is being approached to build. Why should they take you on? Will you give them continued business in the future?

The right way to approach this is to meet with the partner and see if you get along well. Why do it this way?  Well, because you are not getting into a short term business arrangement. This is not like going into a store, buying something of the shelf and then you are done. Everything is custom. When you get along with your partner things happen a lot easier. You might say you are building tacit knowledge in this arrangement. As one of my clients put it, we are married and we are in it for the long haul. There are capital risks that the factories take on, such as construction of the assembly line. The factories want to have partnerships that last a long time so they can justify the added costs. Most of my business partners past clients have been with them for 10 years plus. So, avoid being the lookie loo. You will piss them off. Be a partner instead. You will not regret it.

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