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Tips for taking your hardware design to market
Having fielded many emails and inquiries about new products over the past five years as SparkFun's technical researcher, I've found formulas and patterns that lead to successful products. I aim to provide insight for those looking to take their project to market.
This post was originally supposed to be submitted to John Teel's Predictable Designs blog last month, but due to a catastrophic failure on the part of my computer, it was lost, only to be re-written after the due date. John's blog is great for those looking to design and market hardware, and I highly recommend checking it out. The purpose of this post is to give those looking to work their product into the hobbyist/DIY/maker market insight into what I look for when proposing products for our catalog. I wouldn't take all these points as absolute rules to design by, but keep them in mind when doing so.
You recognize a need being unfulfilled and have a vision for how to provide the solution. You create the final product and start selling it on a site like Tindie. This provides a solid set of sales, but your role shifts from creating the product to support and shipping. While it's not a bad problem to have, you find yourself far removed from the reason you started this in the first place. So you start looking into distributors, someone who can handle sales and support while you concentrate on working on the parts you like. Or maybe you dig doing that stuff as well, and you're looking to bring the product to the next level.
Now there's a good guide written by a former SFE engineer, Jim, on what we look for in terms of design and what questions we need answered in a product pitch. But there are certain aspects that I personally look for that wouldn't be appropriate or relevant in said document. They're more subtle aspects of the product or company that from the surface might not matter, yet could pose risk or be an indicator of a product poised for success. Below are some areas I take into consideration. While most of these relate specifically to something you could see SparkFun selling, some bleed over into consumer electronics.
This one is pretty self explanatory. There once was a time when if you worked with electronics, you worked on Windows. That time is long gone. Sure you can bootcamp in Mac OS, but it adds complexity to the user experience that could sink a project --- especially one that is aimed at beginners for any topic. Bonus points if your tutorials include Linux. But software should be cross-platform. This goes for mobile applications as well.
This seems like a no-brainer, but there are some subtleties to it. My personal definition of stable hardware includes well-documented, legit parts (I don't want to take the fall for you using counterfeit ICs to keep your BOM cost down), but also a sustainable supply (chain). There are lots of opportunity today in surplus. Things like displays and tubes come at a great price from stock of larger companies who no longer need the parts. This is usually a great route for providing cost-efficient designs. What concerns me as a larger purveyor of products is the limited stock of said parts. I don't think I have to explain that low-cost electronics sell extremely well. So what happens when the stock of your low-cost parts run out? We're left with a lot of demand and no way to fulfill it. So while those products are always tempting, I tend to proceed with caution when considering it for the SparkFun catalog.
Again, this is one view of many. If your project is low-cost or price-competitive because you've cut the margins (yours or your distributor's) it's not really low-cost or price-competitive. Yes, there are exceptions to this, and it's a tough point to sell in the world of Raspberry Pi. However, from my vantage point, slim margins are a surefire way to sink a project, especially for a small business. As a distributor, it means less money for me and my company. There are ways to make a slim margin work, but it requires more time and effort, especially if the product doesn't immediately stick out as popular or in demand. From a less apparent viewpoint, look at this from what you will be making. I hear this notion a lot that as the sales increase, the small amount you're earning from each sale will be more bearable. If the product takes off, maybe this might hold true...maybe. But the reality is very few products in our market make it to that point. More than likely, you'll find yourself or your group having to make a tough decision as to whether or not it's worth your time and energy to continue selling at that price. Furthermore, the fixes are not fun. Keeping healthy margins from the start gives you more flexibility in the long run and will definitely make the relationship with your distributors easier.
You'll hear this a lot from investor folk too, but you should be able to tell me in a sentence or less exactly what your product does. So why is that important? When looking at products, I want to know that the problem your product solves is something that affects more than just you. If you need to set a background for me to understand the problem you're addressing, it makes me wonder how many people actually might be facing that same problem or how big the market for this actually is. One example of this that I see often is, "What if you need to use Product or Technology 1 with Product or Technology 2?" While I'm pretty knowledgeable on a lot of topics within DIY and maker electronics, there's plenty I'm not privy to. Requiring further explanation of the problem it solves puts me in the mindset mentioned above. Now don't confuse this direction for your entire pitch needing to be one sentence or less. Absolutely set the background, explain how you got to that point, describe all the in-depth details. But at some point in the pitch, I need to see a sentence or less that tells me exactly what your product does. Not only for the reason described above, but in turn, I'll need to describe the product to others. One extra bit I might add to this; if you find yourself in a position where you think the market for your product simply isn't big enough to move on from your current level, use your simple explanation to consider a broader market you might reach.
This might seem like another no-brainer, but you'd be surprised how apathetic some of these product pitches I receive come off as. This product doesn't have to be your crowning achievement or something you've dedicated your life to. However, show me it's more to you than just a quick way to make a buck. Another recurring theme among product proposals I see is the theoretical nature of them. I understand you don't want to put work into a project that's going nowhere; it accounts for about 50 percent of the work I do here at SparkFun, and I understand that it doesn't feel great when it was "all for nothing." But look at this type of proposal from the distributor standpoint. Here's someone who's only going to create this product or move it forward if I say yes. Will it be difficult to get them to make revisions or help with support of the product? While the point of coming to us in this scenario is getting some of the "business end of things" off of you, you should still be evangelizing your product(s) at any point you can. I'd much rather work with someone who is already thinking about v2 and where they're going with this product than someone who is content with minimizing personal investment.
If it's not apparent yet, a lot of what I'm looking for relates to a long, healthy relationship. While the focus is absolutely the product, the hope in the long term is a healthy supplier relationship. Sales of your product will eventually decline. If you're lucky enough for it to happen three to five years out, your next iteration might be incredibly self-guiding. There will be new tech and focuses of usage with the product that you can build off of. In other situations, it might not be so clear where to go next. It's important to take note of any feedback you get. It might not be relevant at the time, but could become pertinent at a later date. One of the things that makes me happy about longer relationships is seeing an email in my inbox announcing v2 (just try to give us a heads-up before release).
I'll reiterate that this is just one viewpoint in a difficult-to-navigate market. Some of this might not apply to your direction, but I highly recommend taking these points into consideration. I've seen my fair share of companies enter and leave the market, and the ones that seem to work stand out in one or more points above. If you have any questions or comments, drop them below, and I'll try my best to respond. One final note: I absolutely love seeing the community of small business springing up through Tindie and similar sites --- keep them coming!