(01-24-2017 08:43 AM)Phoenix Wrote: Great! In that datasheet, could you please have the following (based on either your experience or your hearsay):
- A typical timeline of bringing a small scale manufacturing product to the market. E.g. from when I have the idea for an "automatic home bread butterer", how long does it typically take from idea to making sales online? What are the stages involved and how long do each normally take?
- About how large are the development teams typically?
- Around what figure are the costs for each prototype construction, and the first production run, from a typical Chinese factory?
Cheers
Without wishing to hijack XPQ22's thread, perhaps I can help shed some light on this too as I have built a business in this area:
- This will depend on how innovative the product is. Assuming it is an innovative product requiring a couple of clever guys (top level recent graduates - you get the best mix of brilliance and affordability as the pay curve for really good people is pretty steep) working on it full time: 1-2 years typically, and probably around $100-200k. Less complex stuff at the bottom end of the scale, more complex consumer stuff towards the top end.
1. First you have the idea. You should immediately get in front of as many potential buyers as possible, and float the idea as something that you've already been working on that is nearly ready for delivery, without promising timelines - be clear the discussion is to gauge interest, but it's important people think this is something they may be able to buy in the near future. This will give you your most important initial feedback - is there a market for your product. When you're asking people if they'd be interested/think it's the best thing since sliced bread, you want at least 50% to be saying yes for it to be worth your while. Even then, no guarantees. This is why it's important for people to think about it in a way that puts money on the line - it can't too abstract to them or the feedback will be misleading.
2. Then you talk to a very good electronics engineer who ideally knows how to get a prototype going inexpensively. A hobbyist is what you want, someone who has lots of interests that are broadly relevant. They'll know about which chips should do the job, bits of hobbyist kit that you can just plug in to give you a shortcut to viable prototype. This should be a quick process to prove fundamental viability - less than 3 months.
3. You get this prototype going. It costs you more than you'd have liked, looks crappier than you'd imagined, but works. You then go back to your initial market, and show them it working. At this point, I think it's crucial if your product is going to make you rich that you're getting upwards of 70% enthusiastic approval and potential buyers, as many of these will take a long time (more than 12 months) to convert to sales. It's important to pipeline early.
4. If you've got the reaction you've hoped for, then now the hard part begins. You've had the thrill of getting something going, and you know you're probably on to a winner. You employ an electronics engineer, or two, and perhaps a software engineer. You're now a team - if these guys sacrifice other opportunities and are loyal to you, they will want, and should get equity. You now settle into a 9-24 month cycle of designing pcbs, specing them, revisioning, debugging, and generally paying huge bills for frustratingly little progress. Every week it will look like you're just a few days or weeks away from your amazing new product. Then you will find that the datasheets provided by seemingly reliable distributors/manufacturers are inaccurate, or details have been missed. For example, you will find that some component driver marketed as ultra low power has a data sheet that describes the ultra low power pin and the correct mapping for it, but makes no mention of a second pin which must be grounded if the component is not to draw 2k milliamps. You will wonder for weeks why your board of 200 such components, all of which are advertised as low power, is drawing 1000 times as much power as it should be. There will be a thousand possible explanations. All of which will be reasonable to investigate. This grounding will require you do another run of boards scrapping everything on your current crop. This new run of boards will have a new error. Allow for at least 3 revisions, the first couple will have bits of wire, resisters, and all sorts of shit soldered onto them.
Whilst doing all this, you need to think about how you'll create a cover for your circuitry, and how that'll look and feel. Initially my advice is to try to repurpose something 'off the shelf' if you can, and build your initial units yourself. Otherwise you'll need to raise VC funding, they'll take 50%+ of your equity, screw you down on price, and still want to sell the business just as it starts to get exciting. Angels would be a better bet, but they will be harder to get money out of and argue more about valuation.
5. At some point, you will run out of errors on your board. Probably about the same time you run out of money, max out your overdraft, and are seriously considering turning to prostitution to keep the business afloat. There will be very little elation at this point, some mild relief, and if you feel reflective you'll probably be surprised at how unaffected you are by what is actually a monumental triumph and testament to your fortitude.
6. Probably at this point a tiny fraction of your 'sure things' from when you initially went to market will mobilise immediately and give you some survival revenue. You'll be frustrated and disappointed at how much longer it still takes to reach breakeven (allow 3-6 months from the product being market ready). All through this period you'll have been generating future leads, all of which will have seemed a million miles away, speculative, and expensive to investigate. There'll be times when you seriously question whether you can afford to pay a £30 train ticket to take a meeting with a major firm who are provisionally interested in your product.
7. One day, after a long period of relentless heartache and frustration, punctuated only occasionally by modest successes, all of this will come good. All of those future leads will start to come in, and you'll get some big contracts, and suddenly after not having had a pot to piss in for years, you will find that you are an overnight success and worth a lot of money. At this point you'll have a hundred irons in the fire, a ton of great ideas for how you're going to take over the world - you'll be able to see how you're going to be worth 8-9 figures within 5 years, and where you might then go from there. If there is a better, more euphoric feeling in life than this - knowing you're on the cusp of something remarkable - then I have yet to experience it.
At this point, it will all have been worth it. The endless hours, the weekends lost, the pussy passed up, the money in salaries that went unearned, the lifestyle you sacrificed and the friends you lost - everything will have been worth the work you put in and you'll be well on your way to a really great life.
If you go down this route, it's going to suck for a long time though, and you should make peace with that.
Additional info:
PCBs typically run $100-300/100 boards from China. Quality is variable, and sometimes you'll find that after run 3 or 4 it drops precipitously. There's very little reason to get these made in China these days. I can get them made in the UK for within 50c/board of what I can get them done in China after I've paid import duties, with none of the hassle. Then you should allow $2-5k depending on complexity per run of circuit boards (per 100) for a factory to oven solder the components.
Hope that helps.