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From Prototype to Production: A Crash Course in Hardware
- 1. Maxim Wheatley 2014 From Prototype to Production:! A Crash Course in Hardware | Presented by Maxim Wheatley | October, 2014 |
- 2. Maxim Wheatley 2014 About Me • Founded 3x Small Businesses • Inaugural Georgetown Summer Startup Program Alum • Georgetown Graduate
- 3. Maxim Wheatley 2014 Launching in Q2: 2015 | @MaximWheatley | @LifeFuels | @Perrelli |
- 4. Maxim Wheatley 2014 The Disclaimer! ;-) What this is:! A high-level intro to key concepts in hardware for entrepreneurs, students, and tinkerers. An overview of the process and fundamental aspects. A foundation to proceed on your own hardware adventure. What this isn’t:! Direct advice. (All hardware startups are different) Blueprints for success! (It IS informed research & opinion on what works.)
- 5. Maxim Wheatley 2014 What I Wish I Knew…
- 6. Maxim Wheatley 2014 I. The New “Hardware Revolution”! • What has changed • The “Internet of Things” • What hasn’t changed • The Old v. New Dynamics ! II. Manufacturing in the U.S. & China! • Understanding the key differences: Pros & Cons • What to look out for ! ! Idea > Prototype > Production III. The Process for Developing, Prototyping & Manufacturing! • Generalized Processes • Planning • Research • Development • Funding • Manufacturing Req. Docs • DFM • Tooling • “Ramp Up” • Factory Check-List • Patents, Ergonomics, & Product-Testing • Pricing • “The Usual Suspects” Common Manufacturing Techniques
- 7. Maxim Wheatley 2014 Industrial Revolution Transition from hand/ manual labor to machines and advancements in chemicals radically transformed industry and daily life.
- 8. Maxim Wheatley 2014 “Industrial Revolution 2.0”
- 9. Maxim Wheatley 2014 More Than You Think… NOT just 3D Printers!!!
- 10. Maxim Wheatley 2014 NOT just 3D Printers!!! It’s Much More…
- 11. Maxim Wheatley 2014 What’s Driving This So-Called Revolution?
- 12. Maxim Wheatley 2014 What’s Changed???
- 13. Maxim Wheatley 2014 Goodbye Wires…
- 14. Maxim Wheatley 2014 Easier, Cheaper, Faster Connectivity Bluetooth LE WiFi RF and many others…
- 15. Maxim Wheatley 2014 Sensors & Batteries Smaller. Cheaper. More Connected. More Available. More Versatile.
- 16. Maxim Wheatley 2014 Electrical Prototyping Cheap. “Beginner Friendly”. Versatile. Proof of Concept.
- 17. Maxim Wheatley 2014 Venture Capital Ecosystem More investment and interest in hardware companies.
- 18. Maxim Wheatley 2014 Venture Capital Ecosystem Outliers are typically founded by previously successful founders N.B. Data for 2014 through May. Number of deals as “major investments in hardware” Source: RoboHub.Org Source: http://tomtunguz.com/
- 19. Maxim Wheatley 2014 Infrastructure Growing ecosystem of Meetups, TechShops, Hacker- and Maker-Spaces
- 20. Maxim Wheatley 2014 Contract Manufacturers More CMs.! ! More accessible. ! ! Willing to work with startups.
- 21. Maxim Wheatley 2014 Crowdfunding Pre-sales. Validation. Feedback. ! Media.
- 22. Maxim Wheatley 2014 The Smartphone as the Hub Powerful centralized hub with robust “App” capability extending features.
- 23. Maxim Wheatley 2014 The Effect of the Cloud Connectivity between devices, services, and APIs is richer and easier than ever.
- 24. Maxim Wheatley 2014 The Internet of Things A fancy phrase for: ! “Devices that connect to one another and interact using the internet via direct wiring, wireless connectivity, and APIs.” ! Concept has been around for awhile (1991), but technology has now become small enough, accessible enough, fast enough, and efficient enough to make it happen.
- 25. Maxim Wheatley 2014 Growth in IoT Devices
- 26. Maxim Wheatley 2014 The Old Model Idea Design Prototype Retailers Manufacture BoM Distribution Fulfillment Get Paid!
- 27. Maxim Wheatley 2014 The New Model Idea Design Prototype Get Paid! Crowdfund BoM Manufacture Distribute Fulfillment
- 28. Maxim Wheatley 2014 What Hasn’t Changed?! ! !
- 29. Maxim Wheatley 2014 Misconceptions… Lean != Cheap Feedback Based! ! Validation! ! Iteration! ! Focus on MVP
- 30. Maxim Wheatley 2014 Shipping (Changed & Hasn’t) • Still limited by time, costs, and regulations specific to shipping. ! ! • Air-freight is MUCH more expensive than ocean-freight.! ! • Packaging & weight is a big issue.
- 31. Maxim Wheatley 2014 Distribution • Still need to determine where the product is warehoused, and fulfilled.! ! • Who sells it?! ! • How do they get it?! ! • How do you manage returns?
- 32. Maxim Wheatley 2014 Product Lifecycle • Need to keep product fresh! ! • Develop follow-on models! ! • Plan according to selling rate and trends
- 33. Maxim Wheatley 2014 Quality Inspection • Ensuring the product is of suitable quality! ! • Consistent quality! ! • Mechanisms for remedying issues
- 34. Maxim Wheatley 2014 Scaling is Still Tough • Manufacturing that responds well to demand! ! • Partners with terms suitable for high & low demand! ! • Commerce platforms that enable growth
- 35. Maxim Wheatley 2014 Partnerships • Partners that address the right demographics (in retail and e-commerce channels)! ! • Partners that supply the appropriate materials
- 36. Maxim Wheatley 2014 Chinese New Year Interesting Fun Fact: No manufacturing gets done during this time. Usually a week at least. Can be an issue for those that don’t know/plan.
- 37. Maxim Wheatley 2014 Manufacturing in U.S.A.
- 38. Maxim Wheatley 2014 Automation Substantial automated manufacturing and assembly infrastructure. Great for larger products.!
- 39. Maxim Wheatley 2014 Shipping Sensitive • Shipping from China via Ocean- Freight is slow (4-6 weeks) ! ! • If speed/ responsiveness to customer is key domestic might make sense.!
- 40. Maxim Wheatley 2014 Low Volume / High Precision • Less ROI on expenses associated with offshore for LV! ! • Plenty of very advanced firms and engineers domestically! !
- 41. Maxim Wheatley 2014 Sensitive/Difficult to Defend IP • Much less risk.! ! • More readily enforceable! ! • No language barriers! ! • Easier to monitor!
- 42. Maxim Wheatley 2014 Serving US Government Requirements dictate domestic manufacture!
- 43. Maxim Wheatley 2014 Manufacturing in China
- 44. Maxim Wheatley 2014 Labor (for now…) • Larger workforce, more quickly activated ! ! however…! ! • Increasing Wages! ! • More Stringent Labor Laws!
- 45. Maxim Wheatley 2014 Supply Chain • Concentrated! ! • Local! ! • Specialized! ! • Existing Relationships! ! • Responsive
- 46. Maxim Wheatley 2014 Expertise • Management! ! • Labor! ! • Engineers! ! • Infrastructure! ! • Relationships
- 47. Maxim Wheatley 2014 Infrastructure • Years of Investment! ! • Spool Up & Down! ! • Typically “Cutting Edge”
- 48. Maxim Wheatley 2014 Established Shipping • Existing relationships with factories and logistics! ! • Partnerships with shipping lines & logistics firms! ! • Familiarity with customs & regulations
- 49. Maxim Wheatley 2014 High-Volume Capability • Readily deployable and trainable workforce w/ experience! ! • Bandwidth and supply chain to produce 100,000+ units
- 50. Maxim Wheatley 2014 Relationships!!!!! ! • Get intros! ! ! • Cultivate! ! • Learn Customs
- 51. Maxim Wheatley 2014 China Best For: • Small electronics w/ circuit boards, displays, motors, plastic moldings, and sheet metal pieces. ! • Tooling for the aforementioned is typically cheaper and faster ! • Large volume of production (thousands not hundreds), becomes more true the cheaper the product is… ! • More “mature” designs, otherwise need “boots-on-the-ground” to debug and refined processes ! • Well-funded businesses: need to invest in inventory and tooling. ! • Small dimensions (weight and size) for shipping requirements ! • Companies with capability to have somebody on-site
- 52. Maxim Wheatley 2014 Look Out! • Chinese trademarks! ! • It’s NOT set-it-and-forget-it ! • IP Assignment! ! • Vendor Supply-Chain ! • Silo-Approach ! • Work with companies that have done similar products/demographics ! • Likely to be copied no matter what… ! • Costs rarely vary by much more than +/- 10% (component costs dictate this) for BOM
- 53. Maxim Wheatley 2014 Taiwan:! Comparing… Pros: Great High-Tech, Engineering Talent, Respect of IP ! Cons: More Expensive, Sometimes Higher Volumes Mexico:! Pros: Nearby, Shipping Speed, Labor Costs ! Cons: Notorious Regulatory Hassles, Audits, and Tax Issues
- 54. Maxim Wheatley 2014 Specialists Are Everywhere… Dependent on Product-Type
- 55. Maxim Wheatley 2014 Planning Development Production Opportunity Identification Project Definition Conceptualization Refinement Tooling Ramp-Up • Identify Needs/ Opportunities ! • Define Market ! • Define Business Objectives ! • Identify Limitations ! • Determine Scope/ Timeline ! • Set Goals ! • Identify Team ! • Intel Gathering • Market Research ! • Customer Studies & Customer Journey ! • Competitive Analysis ! • Validation ! • Product Options ! • Preliminary Specs ! • Design Research ! • Product Specs ! • Design Brief Creation • Aesthetic, Ergonomic, Functionality, & Manufacturing Options ! • Concept Creation ! • Prototype Creation ! • User Testing ! • Manufacturing Feasibility ! • Patent Assessments ! • Design Engineering ! • Cost Estimates • Refine Concept ! • Manufacturing Analysis ! • Manufacturing Estimates ! • Build & Test Prototypes ! • Conduct User Testing ! • All Specs to Engineering • Design Tooling ! • Procure Tooling ! • Debug Tooling ! • Beta Prototypes ! • Finalize “Go- To-Market” Plan ! • Packaging Design & Creation ! • Instructions Creation • Assembly Set- Sources: “The Industrial Design Reference + Specification Book”, Phil Baker, Blue Ox Industrials, Whiteboard Product Solutions Up ! • Workforce Prep ! • Fixture Finalization ! • Assess Production Rates ! • Quality Monitoring ! • Cost Reductions ! • Design Improvements The Process
- 56. Maxim Wheatley 2014 More Process… Planning Development Production • Discovery Phase:! • Research • Ideate ! • Definition Phase:! • Product Specs • Budget • Timeline • Capabilities ! • Breadboarding! • Tech Validation • Concept Validation ! • Packaging Process ! • Investigate Manufacturing Possibilities • Refinement! • Tech Validation • Proofs of Concept ! • Vendor/Partner Evaluation ! • Focus Groups • Prototyping Low-Fi >> Hi-Fi • Design Development + Production Preparation ! • CAD + GA Drawings • Develop Documentation • Final Prototype w/ Revisions • Packaging Finalization • Tooling Release • Production! • Order Tooling & Implement • First Run • Debugging • Production • Assembly • Shipping • Fulfillment • Inventory Sources: “The Industrial Design Reference + Specification Book”, Phil Baker, Blue Ox Industrials, Whiteboard Product Solutions
- 57. Maxim Wheatley 2014 Planning • Market Research • Competitive Landscape • Focus Groups • Demographic Intel • Buyer Personas • Failures & Successes in similar Categories • Stakeholders (Buyers & Users sometimes different! Who buys, who uses, who else uses it?)
- 58. Maxim Wheatley 2014 Get Obsessed With “Teardowns” Great source of intel Abstract the BOM
- 59. Maxim Wheatley 2014 Research & Diligence • Parts Sourcing ! • Regulations ! • Certifications ! • Patents & IP
- 60. Maxim Wheatley 2014 Development • Design Research & Conceptualization • Customer Studies & The Customer Journey • Construction of the “Design Brief” • Needs & Features • “Look & Feel” • Users • Sales Channels & Target Price Point
- 61. Maxim Wheatley 2014 Funding Options • Bootstrap! ! • FFF Investors (Early on) ! • Suppliers (runs on credit) ! • Royalties on Product w/ Partners ! • Pre-Sales! ! • Crowdfunding ! • Equity Crowdfunding! ! • Angel Investors ! • Venture Capital! ! • Debt Financing (on P.O.s (~80) and Inventory (~50))
- 62. Maxim Wheatley 2014 Manufacturing Requirements Doc • Product Description ! • How it Works ! • Needs it Solves > Problem/Solution! ! • Features (versioning)! ! • Software Overview (if necessary) ! • Market Demographics • Market Information ! • Competition/Competitive Analysis ! • Sales Channels ! • Pricing Expectations ! • Margin Requirements ! ! • Sales Volumes Estimates! ! • Warranty Requirements
- 63. Maxim Wheatley 2014 “No plan survives contact with a factory”! ! - Cyril Ebersweiler ! ! !
- 64. Maxim Wheatley 2014 Refining • Distilling of the best ideas • Aesthetics • Materials! • Manufacturing Processes ! • Supplier Identification • Cost Discovery (RFP etc.) • Goals: Drawings, renderings, models, CAD files.
- 65. Maxim Wheatley 2014 Product Sketches
- 66. Maxim Wheatley 2014 3D Rendering
- 67. Maxim Wheatley 2014 Dimensional Drawing
- 68. Maxim Wheatley 2014 Things to Ask: “How can we do it differently?”! “What’s the biggest complication?”! “Longest Lead-Time Part?”!
- 69. Maxim Wheatley 2014 Breadboarding
- 70. Maxim Wheatley 2014 Concept Model
- 71. Maxim Wheatley 2014 Functional Prototype And Beyond…
- 72. Maxim Wheatley 2014 General Assembly Drawing
- 73. Maxim Wheatley 2014 But what about software???
- 74. Maxim Wheatley 2014 CAPITALISM Can’t spell without API !
- 75. Maxim Wheatley 2014 Software ALWAYS in Parallel
- 76. Maxim Wheatley 2014 Connectivity • Bluetooth (Low Energy) ! • NFC ! • SRF (point-to-point radio) ! • UART ! • WiFi (TCP or UDP) ! !
- 77. Maxim Wheatley 2014 Security Concerns • Understand how to connect the data, warehouse it safely, and process in a readily scalable manner (i.e. don’t have to migrate things to keep up with needs) ! • HTTP/HTTPS ! • Constrained Application Protocol (CoAP) ! • MQTT 3.1 ! • If leveraging health data, need to be HIPAA Compliant!!
- 78. Maxim Wheatley 2014 Factory Checklist • Where is everything warehoused? • Do we have access to managers and supervisors? • Do they have resources necessary?! • Do they have partners necessary?! • Is everything clean and dry? • Do they have scope to scale up or down?! • How quickly can they change production?! • Clear payment terms? • History with similar products? • Prepared to start (capitalized enough?) • Stable management and finances? Sources: Dragon Innovations, and “From Concept to Consumer” Phil Baker, Experience!
- 79. Maxim Wheatley 2014 Production • Design Finalization • Design for Manufacturing • Tooling Development: Key considerations…! • Assembly Design / Process Design for Mass Production • First Prototypes Built • Tooling Release: Drawings, CAD files, BOM, Prototypes, Accompanying Materials
- 80. Maxim Wheatley 2014 Production (continued) • Tooling Finalization (Tools get built!) • Tooling debugging (in the process) • Production-Grade Prototypes (Testing all processes)
- 81. Maxim Wheatley 2014 Design for Manufacturing: ! Make it easy/simple to actually produce! ! • Reduces costs, mitigates risks, faster, and more reliable ! • Number of pieces & Ease of assembly influence costs most significantly ! • Simpler shapes ! • Less temperamental materials !! • Typically low five figures to mid six figures, manufacturer completes/refines designs to make it more optimized for construction and assembly ! • Get literal to estimate process (how long does it take to put together w/ how many units w/ how many assemblers?)
- 82. Maxim Wheatley 2014 Saving Money: • Materials: Investigate Similar Products, Define Properties, Shop Carefully, Consider Key Factors ! • Lifecycle of Tooling and Molds ! • Reduce the Complications ! • Appropriately Setting Tolerances (Less Tolerance for Failure = More Time & Money)! ! • Less Assembly, Less Pieces, Less Fasteners ! • Understand Order Thresholds for Discounts ! • Reduce Scrap !
- 83. Maxim Wheatley 2014 Tooling: • Tools v. Molds • Different Processes, Materials, and Loads Require Different Tooling • High-Volume/Quality-Finish = Harder Materials (Steel) • Low-Volume/Lower-Quality = Softer Materials (Plastic, Aluminum, Elastomer, Wood, etc.) • Balance cost of low-cost tooling (sometimes higher unit costs)
- 84. Maxim Wheatley 2014 Tooling Process • five to six figure costs ! • 50% up front ! • 50% when ready to roll ! • Maintain ownership ! • Mobility of Tooling
- 85. Maxim Wheatley 2014 Assembly Fixtures “The things we need to make this work and get it produced.” ! ! Specific tools, trays, equipment, etc. ! Typically: $XXX - $XX,XXX
- 86. Maxim Wheatley 2014 “Ramp Up” • Assembly Process Finalized & Set-Up • Assembly Fixtures Finalized and Installed • Instructions Completed • Workforce Trained & Prepared • Final Testing Prior to “Go-Button” • Production Rate & Inventory Refining…
- 87. Maxim Wheatley 2014 Because….
- 88. Maxim Wheatley 2014 “Inventory is Fundamentally Evil” ! ! - Tim Cook, CEO of Apple ! ! !
- 89. Maxim Wheatley 2014 Manufacturing Tips • Snap-Together/Fastener-Free = Best ! • Inspection at all stages! ! • Avoid colors that are easily variable and difficult to match ! • Pre-certified batteries!! ! • “Common” components = Good ! • Ejection ports! ! • Get it to the factory…
- 90. Maxim Wheatley 2014 Manufacturing Agreement ! • Products Specs • Manufacturing & Development Schedule! • Obligations For All Involved • Costs & Payment Schedule/Milestones! • Assignment and Ownership of Inventions, Tooling, etc.! • Indemnification • Resolutions of Disputes • Confidentiality & Disclosure • Engineering Change Orders! • Quality Requirements Docs • Inspection & Acceptance • Order Lead-Time • “Epidemic Failure” Clauses! • Product Costs • Delivery Terms! • Warranties ! !
- 91. Maxim Wheatley 2014 Patents • Utility: Processes, machines, compositions, “articles of manufacture”, and improvements of the aforementioned. What/How it does something. • Design: Aesthetics that do not dictate function. • Provisional: Quick, easy, establishes filing date, best when done in conjunction with plan to file properly. (“Patent pending”)
- 92. Maxim Wheatley 2014 Patents • Costs: Time & Money ! • Defendible? ! • Policeable? ! • Makes Sense for Lifecycle? ! • Relevant? ! • Patent-Pending isn’t Enforceable
- 93. Maxim Wheatley 2014 Out-Competing Copiers… • Brand ! • Design ! • Marketing ! • Experience ! • Customer Service ! • Warranty ! • Community ! • Next Version, Next Product ! • Software, Software, Software ! !
- 94. Maxim Wheatley 2014 Ergonomics • Understand users and use-cases • Obtain relevant measurements dimensions • Complete tests with all types of users • Factors in safety
- 95. Maxim Wheatley 2014 Product Testing • Testing temperature, running, humidity, shock, vibrations, drop test (w/ and w/out packaging) ! • If emits a frequency of 500KHz+ requires FCC testing (UL) ~2-3 months ! • $20,000 - $50,000 range ! • Stress Testing Components vs. Composite Product
- 96. Maxim Wheatley 2014 Pricing “Total Direct Costs” = BOM + Direct Labor ! “Direct Labor”: Typically ~10% of BOM ! “Factory Costs”: Typically ~30% of TDC ! FC = TDC x 1.3 ! Overall, consider BOM x 1.5 as a good margin (to include shipping, tooling, logistics, etc.) Source: “From Concept to Consumer”, Phil Baker
- 97. Maxim Wheatley 2014 Pricing BOM x 1.5 = ~Final Cost ! Final Cost / (1 - Margin %) = Cost to Retailers Source: “From Concept to Consumer”, Phil Baker
- 98. Maxim Wheatley 2014 Source of adafruit.com Pricing
- 99. Maxim Wheatley 2014 Pssst!… Prototypes at production grade = ~2x-10x the cost of normal production
- 100. Maxim Wheatley 2014 Sales & Marketing • Self-Operated E-Commerce = Most Profitable • E-Commerce Partners • “Online Big-Box” • Retail • Big-Box Retail (Approach w/ representatives and strategize margins and packing in advance.)
- 101. Maxim Wheatley 2014 Retail Pitfalls • Up front fees ! • Tailored packaging! ! • Inventory risks! ! • Commissions ! • Placement issues ! • Ingram, Micro, Tech Data, D&H (worth looking into) ! • Sales representatives are gold. But… take 5%-10% ! • “Soft Dollars” = Danger Zone
- 102. Maxim Wheatley 2014 Fulfill • Assembly Locations… • Fulfillment Locations • Packaging for Retail v. Packaging for Web • Inventory v. Drop-Ship v. Back-Order • Prepare for Returns • Pick-Pack Systems • Leverage Existing Systems (i.e. Amazon Fulfillment Centers)
- 103. Maxim Wheatley 2014 Processes • Plastic Molding: Thermoplastic (soften w/ heat) Thermoset Plastic (harden w/ heat) • Electrical Discharge Machining (EDM): Metal cutting process used for metal tool forming • Multi-Cavity v. Single-Cavity! • Blow-Molding (Extrusion, Injection, Stretch) • Thermoforming: Plastic Sheets Heated & Forced Into Cavity w/ +/- Pressure “Steel Safe”: tool details that can be added later without adding material to the tool itself. Multi-Cavity Usually More Expensive Check out Mold-Tech Corporation
- 104. Maxim Wheatley 2014 Processes • Casting: Molten Plastic • Compression Molding: Heated Mold Forms Shape • Extrusion: Heated plastic is forced through a die to create a continuous piece • Injection Molding: Liquid Plastic is injected into a cavity to cool • Reaction Injection Molding (RIM): Catalyst & Resin Combined to Create Rigid Part With Compression Molding, “Flash” can be an issue, this adds to cost Casting = Low Volume! ! Injection = High Quality Finish Ejection Ports & “Knit-Lines” can be issues…
- 105. Maxim Wheatley 2014 Processes • Fused Deposit Modeling (FDM): CAD file instructs layered resin • Stereolithography (SLA) 3D Printing! Layered. Slow, not-scalable (usually), highly-detailed. FDM isn’t suited for high-quality parts or production grade prototypes Speed, cost, quality, depends heavily on materials, machine, and settings Usually requires secondary processes to finish/finalize
- 106. Maxim Wheatley 2014 Processes • Computerized Numerical Control (CNC) Milling: Metal, plastic, or composites. great for functional prototypes. • Die-Casting: Molten metals into molds with pressure • Deep-Draw Stamping: Hollow shapes created by stamping metal over a mold CNC is slow and can be expensive for mass production Needs low melting-point metal Usually requires secondary processes to finish/finalize
- 107. Maxim Wheatley 2014 “If you’ve got a great product, one way or another, it all works out.” ! ! - Larry Hatch, President of AMTI ! ! !
- 108. Maxim Wheatley 2014 Thanks for making it through!! ! ! ! ! This is the presentation I wish I’d had when I began. I hope it serves you well!
- 109. Maxim Wheatley 2014 Now Go Build Something!
- 110. Maxim Wheatley 2014 Recommended Reading • “From Concept to Consumer: How to Turn Ideas Into Money” — Phil Baker • “Making It: Manufacturing Techniques for Product Design” — Chris Leften • “The Silent Intelligence” — Kellmereit, Obodovski • Reddit /r/hwstartups! • Quora! • “Prototyping & Low-Volume Production” — Rob Thompson • “The Design of Everyday Things” — Don Norman • “Universal Principles of Design” — Lidwell, Holden, Butler • “Zero to Maker” — David Lang
- 111. Maxim Wheatley 2014 Manufacturing Resources • Alibaba • GlobalSources.com • HKTDC.com • iSuppli.com • Avnet • Octopart • Flextronics • ProtoMold
- 112. Maxim Wheatley 2014 Tools of the Trade • Solidworks • Autodesk Fusion 360 • 123D Print • 123DApp.com • Circuits.io • MakerBot • Arduino • Spark Cores • Rasberry Pi