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In this presentation, Dragon Innovation will provide an overview on how to prevent crowdfunding from destroying the hardware revolution. This presentation was given at SolidCon in May 2014. Topics will include: - Dragon Innovation Introduction - Product Development: The Old Way & The New Way - Make Sure You Don't Sell Something You Can't Build Share the presentation here: http://bit.ly/Prevent-Crowdfunding-Destroying-Hardware-Revolution About Dragon Innovation Dragon Innovation works with entrepreneurs to launch hardware products and scale companies. Founded by a team of hardware experts, Dragon provides a clear path from prototype through production with unmatched manufacturing expertise and trusted connections. Dragon's client roster includes Coin, MakerBot, LIFX, Scout, Romotive, Sifteo, Orbotix, FormLabs and over 100 more companies paving the road for how new technology gets made. Connect with Dragon Innovation Website: http://www.dragoninnovation.com Blog: http://blog.dragoninnovation.com Twitter: http://twitter.com/dragoninnovate Slideshare: http://www.slideshare.net/dragoninnovation/
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HOW TO PREVENT CROWDFUNDING FROM DESTROYING THE HARDWARE REVOLUTION
SOLIDCON 2014
DRAGON INNOVATION, INC.
MAY 22, 2014
SCOTT N. MILLER | CEO | @DRAGONINNOVATE | WWW.DRAGONINNOVATION.COM
1Thursday, May 22, 14
Quick Survey
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2Thursday, May 22, 14
MIT RoboTuna
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3Thursday, May 22, 14
Disney Dino
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4Thursday, May 22, 14
Product Development
The Old Way: Build then Sell
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5Thursday, May 22, 14
My Real Baby
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6Thursday, May 22, 14
Woohoo!!!
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7Thursday, May 22, 14
Agenda
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Arrgh!
8Thursday, May 22, 14
Agenda
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9Thursday, May 22, 14
DRAGON INNOVATION HAS HELPED LAUNCH AND SCALE OVER 100 COMPANIES SINCE 2009
10Thursday, May 22, 14
HARDWARE IS EXPLODING
Unprecedented periods of growth come with lots of chaos.
11Thursday, May 22, 14
Hardware Wave Enablers
• Nearly Ubiquitous High-Speed Wireless Access
• Unprecedented Global Technology Innovation
• Fearless and Connected Entrepreneurs & Consumers
• Available Capital• Inexpensive Devices, Access & Apps• Ability to Reach Millions of New
Users in Record Time
KPCB DECEMBER 2012
12Thursday, May 22, 14
PROTOTYPING HAS NEVER BEEN EASIER
• 3D Printing
• Arduino, Raspberry Pi, Beagle Bone, Edison
• TechShop
• GrabCAD, Upverter, GitHub
• SparkFund, Adafruit
• Easier Access to Capital
13Thursday, May 22, 14
HARDWARE INNOVATION NOW COMES FROM THE LITTLE GUY
14Thursday, May 22, 14
Product Development
The New Way: Sell then Build
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15Thursday, May 22, 14
CROWDFUNDING IS FUEL ON THE FIRE
•Raise capital upfront•Validate product / market fit•Create engaged & passionate community early•Get the attention of media and investors•Understand build volumes
New transactional model is perfect for hardware
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BE CAREFUL YOU DON’T SELL
SOMETHING YOU CAN’T BUILD
17Thursday, May 22, 14
Idea Crowdfund
Manufacture
PERCEIVED PRODUCT TIMELINE
Prototype
D E F G H I J K L M N O P Q
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
R S T U V W X YA B C
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Idea DeliverCrowdfund Manufacture
MORE REALISTIC PRODUCT TIMELINE
Proto
CF Prep
X Y ZK L M N O P Q R S T U V WI J F G HC D E A B
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Manufacturing is Complex
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Why Delivering Is Hard
Getting from prototype to delivery is a long journey with many ‘unknown unknowns ’:•COGS, tooling and manufacturing costs•Lead times•Permanence of Quality•Iteration cycles•DFMA•Factory Selection and Management•Team Scalability•Schedule & Project Management•Specialized skills (ME / EE / SW/ Q / SC / Logs)
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•NRE for Prototype to DFM•COGS•Tooling Costs•Manufacturing Costs•Pre-Sale Price•Transaction Costs
Calculate An Accurate Funding Threshold
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COGS Drivers
YOUR DESIGN• Material and Component Selection• Fabrication Method• Manufacturing Efficiency (First Time
Yield, machine tonnage, assembly labor, number of operations, etc.)
• Quality Requirements (driven by requirements / Voice of Customer)
• Packout (replaceable vs. rechargeable batteries; packaging; spares, etc.)
MANUFACTURING PARTNER• BOM Transparency• Profit Margin• Labor Rate• Currency• Geographic Location (shipping, tariffs,
etc.)• Capability (in-house vs. outsourced)• Supply Chain (Purchasing Power,
volume (piggy back), Consigned vs Purchased, etc).
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Controlling Costs
1.Deconstruct the BOM.2.Separate special components.3.Transparency4.Compare to standards.5.NegoAate Inclusions
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1328
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221721
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1812 23
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2915
166
897
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ITEM NO. PART NUMBER DESCRIPTION QTY.
1 100132 Heatsink, Aavid 60520 12 PCB 1
100104 Circuit board blank 1 100015 LED, Luxeon LXHL-LW6C 1
3 GATE 1 100110 Film Gate 1 100011 Backgate 1 100024 Film Spacer 1
4 Bottom 1 100144 Bottom Plate 1 100029 Leaf Spring 2
5 Knobreel 2 100106 Cover Bush 1 100151 Dowel .125 dia 2.000 long 1 100009 Driver 1 100153 Gripring .125 dia 1 100149 Knob bush 1 100007 Clutch, one-way, Torrington RC-02 1 100152 Washer, ss .125 id, McMaster 98019A310 1 100017 Knob, plastic McMaster 7354K15 1 100045 Felt washer 1
6 Reel 27 condentube 1
100031 Condenser lens, small Fisher Price 1 100105 Condenser Tube 1 100154 O-ring Buna -120 1 100035 Retaining ring, internal 1.062 dia 1 100031b Condenser lens, large, Fisher-Price 2
8 100162 Spacer, condenser lens, short 19 100136 Spacer, condenser lens, long 1
10 100163 Spacer, projector, short 111 FHMS Phillips M4x20 812 PHMS Phillips M4x8 613 PHMS Phillips M4x6 514 PHMS Phillips M5x16 815 FHMS Phillips M4x12 616 PHMS Phillips M4x12 117 PHMS M4x8 618 100150 Endplate, Right 119 100160 Endplate, Left 120 100100 Front Plate 121 100138 Projector Lens Housing 122 100148 End Spacer 223 100145 Top Plate 124 100158 Window Edmund R39-773 125 100146 Handle 126 100161 M5 Acorn Nut 127 100147 Half Bridge 128 100012 Focus Screw McMaster 92558A170 129 100143 Spacer, .25 dia, .19 long 430 100156 Spacer, projector, long 131 FHMS Phillips M4x8 232 100150 Washer, Nylon, MSC 05401757 133 100159 Detent 134 100101 Bumper, rubber McMaster 9540K35 835 100039 Switch, SPST rocker Carlingswitch 136 100155 Projector lens, concave 137 100157 Projector lens, plano 1
D
C
B
AA
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12345678
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APPLICATION
DIMENSIONS ARE IN MILLIMETERSTOLERANCES: 0,1MM ANGULAR: 0 30'
MATERIAL
FINISH
DRAWN
APPROVED
DATENAME
TITLE:
SIZE
BDWG. NO. REV
SCALE 2:5
UNLESS OTHERWISE SPECIFIED:
KINKAJOU DELTA100141
DO NOT SCALE DRAWING
REMOVE ALL BURRS AND SHARP EDGES
allen 21july04
Anatomy of a BOM• Plastic• Purchased Parts• Electrical Components• Consigned Components• Deco• Packaging• Assembly Labor• CM Profit, Overhead and Scrap• Overland Transportation
25Thursday, May 22, 14
• Does it matter that it is a gear???
• Components (3)1. Material Cost
= Part Weight * Resin Cost
2. Machine Overhead: = Hourly Cost * Cycle Time (sec) / (3,600 sec / hr)
3. Factory Mark-up, Scrap and Overhead (%)
• Total Part Cost: = (Material Cost + Overhead Cost) * (1+Factory M/U)
How to Calculate Plastic Costs
26Thursday, May 22, 14
HK Resin Prices (USD/Ton)
Reference: http://www.nhh.com.hk/eng/trading/price_trend.asp(you will need to create a login)
27Thursday, May 22, 14
Item Cost (USD)
280 Ton / hr $15.48
220 Ton / hr $10.96
180 Ton / hr $8.38
140 Ton / hr $7.09
100 Ton / hr $5.80
80 Ton / hr $5.16
Example PRC Molding
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How to Calculate EE Costs
• Cost = Component * Usage• Separate high cost components over a certain
threshold. Apply a lower mark-up.• Apply Factory M/U
29Thursday, May 22, 14
Typical PRC CM Margins(Profit, Scrap, Overhead)
PCBA6–8%
Toys12%
Consumer15%
Medical
>40%
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•Volume Dependent (5k units Threshold)•Domestic CM (USA)•Overseas CM (China)
Manufacturing Strategy
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Agenda
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Dragon [email protected]
@dragoninnovate
http://www.slideshare.net/dragoninnovation
33Thursday, May 22, 14
