1. Maxim Wheatley2014From Prototype to Production:!A Crash Course in Hardware| Presented by Maxim Wheatley | October, 2014 |

2. Maxim Wheatley2014 About Me Founded 3x Small Businesses Inaugural Georgetown Summer Startup Program Alum Georgetown Graduate 3. Maxim Wheatley2014Launching in Q2: 2015| @MaximWheatley | @LifeFuels | @Perrelli | 4. Maxim Wheatley2014The Disclaimer! ;-)What this is:!A high-level intro to key concepts in hardware forentrepreneurs, students, and tinkerers. An overview ofthe process and fundamental aspects. A foundation toproceed on your own hardware adventure.What this isnt:!Direct advice. (All hardware startups are different)Blueprints for success! (It IS informed research &opinion on what works.) 5. Maxim Wheatley2014 What I Wish I Knew 6. Maxim Wheatley2014I. The New Hardware Revolution! What has changed The Internet of Things What hasnt 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 > ProductionIII. 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 ManufacturingTechniques 7. Maxim Wheatley2014Industrial RevolutionTransition from hand/manual labor tomachines andadvancements inchemicals radicallytransformed industryand daily life. 8. Maxim Wheatley2014 Industrial Revolution 2.0 9. Maxim Wheatley2014More Than You ThinkNOT just 3D Printers!!! 10. Maxim Wheatley2014NOT just 3D Printers!!!Its Much More 11. Maxim Wheatley2014Whats Driving ThisSo-CalledRevolution? 12. Maxim Wheatley2014Whats Changed??? 13. Maxim Wheatley2014 Goodbye Wires 14. Maxim Wheatley2014Easier, Cheaper, FasterConnectivityBluetooth LE WiFi RFand many others 15. Maxim Wheatley2014 Sensors & BatteriesSmaller. Cheaper.More Connected.More Available.More Versatile. 16. Maxim Wheatley2014 Electrical PrototypingCheap. BeginnerFriendly. Versatile.Proof of Concept. 17. Maxim Wheatley2014 Venture Capital EcosystemMore investmentand interest inhardwarecompanies. 18. Maxim Wheatley2014 Venture Capital EcosystemOutliers are typically founded bypreviously successful foundersN.B. Data for 2014 through May.Number of deals as majorinvestments in hardwareSource: RoboHub.Org Source: http://tomtunguz.com/ 19. Maxim Wheatley2014 InfrastructureGrowing ecosystem ofMeetups, TechShops,Hacker- and Maker-Spaces 20. Maxim Wheatley2014 Contract ManufacturersMore CMs.!!More accessible. !!Willing to work withstartups. 21. Maxim Wheatley2014 CrowdfundingPre-sales.Validation.Feedback. !Media. 22. Maxim Wheatley2014The Smartphone as the HubPowerfulcentralized hubwith robustApp capabilityextendingfeatures. 23. Maxim Wheatley2014The Effect of the CloudConnectivity betweendevices, services,and APIs is richer andeasier than ever. 24. Maxim Wheatley2014The Internet of ThingsA fancy phrase for: !Devices that connect to one another andinteract using the internet via direct wiring,wireless connectivity, and APIs.!Concept has been around for awhile (1991),but technology has now become smallenough, accessible enough, fast enough,and efficient enough to make it happen. 25. Maxim Wheatley2014Growth in IoT Devices 26. Maxim Wheatley2014 The Old ModelIdea Design PrototypeRetailers Manufacture BoMDistribution Fulfillment Get Paid! 27. Maxim Wheatley2014 The New ModelIdea Design PrototypeGet Paid! Crowdfund BoMManufacture Distribute Fulfillment 28. Maxim Wheatley2014What HasntChanged?!!! 29. Maxim Wheatley2014MisconceptionsLean != CheapFeedback Based!!Validation!!Iteration!!Focus on MVP 30. Maxim Wheatley2014 Shipping (Changed & Hasnt) Still limited by time,costs, andregulations specificto shipping. !! Air-freight is MUCHmore expensivethan ocean-freight.!! Packaging & weightis a big issue. 31. Maxim Wheatley2014 Distribution Still need todetermine wherethe product iswarehoused, andfulfilled.!! Who sells it?!! How do they get it?!! How do youmanage returns? 32. Maxim Wheatley2014 Product Lifecycle Need to keepproduct fresh!! Develop follow-onmodels!! Plan according toselling rate andtrends 33. Maxim Wheatley2014 Quality Inspection Ensuring theproduct is ofsuitable quality!! Consistentquality!! Mechanisms forremedying issues 34. Maxim Wheatley2014 Scaling is Still Tough Manufacturing thatresponds well todemand!! Partners with termssuitable for high &low demand!! Commerceplatforms thatenable growth 35. Maxim Wheatley2014 Partnerships Partners thataddress the rightdemographics (inretail and e-commercechannels)!! Partners thatsupply theappropriatematerials 36. Maxim Wheatley2014 Chinese New YearInteresting FunFact:No manufacturinggets done duringthis time. Usually aweek at least.Can be an issue forthose that dontknow/plan. 37. Maxim Wheatley2014 Manufacturing in U.S.A. 38. Maxim Wheatley2014 AutomationSubstantialautomatedmanufacturing andassemblyinfrastructure.Great for largerproducts.! 39. Maxim Wheatley2014 Shipping Sensitive Shipping fromChina via Ocean-Freight is slow(4-6 weeks) !! If speed/responsivenessto customer iskey domesticmight makesense.! 40. Maxim Wheatley2014 Low Volume / High Precision Less ROI onexpensesassociated withoffshore for LV!! Plenty of veryadvanced firmsand engineersdomestically!! 41. Maxim Wheatley2014 Sensitive/Difficult to Defend IP Much less risk.!! More readilyenforceable!! No languagebarriers!! Easier to monitor! 42. Maxim Wheatley2014 Serving US GovernmentRequirementsdictate domesticmanufacture! 43. Maxim Wheatley2014Manufacturing in China 44. Maxim Wheatley2014Labor (for now) Larger workforce,more quicklyactivated !!however!! Increasing Wages!! More StringentLabor Laws! 45. Maxim Wheatley2014 Supply Chain Concentrated!! Local!! Specialized!! ExistingRelationships!! Responsive 46. Maxim Wheatley2014 Expertise Management!! Labor!! Engineers!! Infrastructure!! Relationships 47. Maxim Wheatley2014 Infrastructure Years ofInvestment!! Spool Up & Down!! TypicallyCutting Edge 48. Maxim Wheatley2014Established Shipping Existingrelationships withfactories andlogistics!! Partnerships withshipping lines &logistics firms!! Familiarity withcustoms &regulations 49. Maxim Wheatley2014High-Volume Capability Readilydeployable andtrainableworkforce w/experience!! Bandwidth andsupply chain toproduce 100,000+units 50. Maxim Wheatley2014Relationships!!!!!! Get intros!!! Cultivate!! LearnCustoms 51. Maxim Wheatley2014China Best For: Small electronics w/ circuit boards, displays, motors, plasticmoldings, and sheet metal pieces.! Tooling for the aforementioned is typically cheaper and faster! Large volume of production (thousands not hundreds), becomesmore true the cheaper the product is! More mature designs, otherwise need boots-on-the-ground todebug 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 Wheatley2014Look Out! Chinese trademarks!! Its NOT set-it-and-forget-it! IP Assignment!! Vendor Supply-Chain! Silo-Approach! Work with companies that have donesimilar products/demographics! Likely to be copied no matter what! Costs rarely vary by much more than+/- 10% (component costs dictatethis) for BOM 53. Maxim Wheatley2014Taiwan:!ComparingPros: Great High-Tech,Engineering Talent, Respect of IP!Cons: More Expensive,Sometimes Higher VolumesMexico:!Pros: Nearby, Shipping Speed,Labor Costs!Cons: Notorious RegulatoryHassles, Audits, and Tax Issues 54. Maxim Wheatley2014Specialists Are EverywhereDependent on Product-Type 55. Maxim Wheatley2014Planning Development ProductionOpportunityIdentificationProject Definition Conceptualization Refinement Tooling Ramp-Up Identify Needs/Opportunities! Define Market! Define BusinessObjectives! 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, &ManufacturingOptions! Concept Creation! Prototype Creation! User Testing! ManufacturingFeasibility! PatentAssessments! DesignEngineering! Cost Estimates Refine Concept! ManufacturingAnalysis! ManufacturingEstimates! Build & TestPrototypes! Conduct UserTesting! All Specs toEngineering DesignTooling! ProcureTooling! DebugTooling! BetaPrototypes! Finalize Go-To-MarketPlan! PackagingDesign &Creation! InstructionsCreation Assembly Set-Sources: The Industrial Design Reference + Specification Book, Phil Baker, Blue Ox Industrials, Whiteboard Product SolutionsUp! WorkforcePrep! FixtureFinalization! AssessProductionRates! QualityMonitoring! CostReductions! DesignImprovementsThe Process 56. Maxim Wheatley2014More ProcessPlanning Development Production DiscoveryPhase:! Research Ideate! DefinitionPhase:! ProductSpecs Budget Timeline Capabilities! Breadboarding! TechValidation ConceptValidation! PackagingProcess! InvestigateManufacturingPossibilities Refinement! TechValidation Proofs ofConcept! Vendor/PartnerEvaluation! Focus Groups Prototyping Low-Fi>> Hi-Fi Design Development+ ProductionPreparation ! CAD + GADrawings DevelopDocumentation Final Prototype w/Revisions PackagingFinalization Tooling Release Production! Order Tooling &Implement First Run Debugging Production Assembly Shipping Fulfillment InventorySources: The Industrial Design Reference + Specification Book, Phil Baker, Blue Ox Industrials, Whiteboard Product Solutions 57. Maxim Wheatley2014 Planning Market Research Competitive Landscape Focus Groups Demographic Intel Buyer Personas Failures & Successes insimilar Categories Stakeholders (Buyers & Users sometimes different! Who buys, whouses, who else uses it?) 58. Maxim Wheatley2014Get Obsessed WithTeardownsGreat source of intelAbstract the BOM 59. Maxim Wheatley2014Research & Diligence Parts Sourcing! Regulations! Certifications! Patents & IP 60. Maxim Wheatley2014 Development Design Research & Conceptualization Customer Studies & The CustomerJourney Construction of the Design Brief Needs & Features Look & Feel Users Sales Channels & Target PricePoint 61. Maxim Wheatley2014Funding 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 Wheatley2014Manufacturing Requirements Doc Product Description! How it Works! Needs it Solves >Problem/Solution!! Features (versioning)!! Software Overview (ifnecessary)! Market Demographics Market Information! Competition/CompetitiveAnalysis! Sales Channels! Pricing Expectations! Margin Requirements !! Sales VolumesEstimates!! Warranty Requirements 63. Maxim Wheatley2014No plan survivescontact with afactory!!- Cyril Ebersweiler!!! 64. Maxim Wheatley2014 Refining Distilling of the best ideas Aesthetics Materials! Manufacturing Processes ! Supplier Identification Cost Discovery (RFP etc.) Goals: Drawings, renderings,models, CAD files. 65. Maxim Wheatley2014 Product Sketches 66. Maxim Wheatley2014 3D Rendering 67. Maxim Wheatley2014 Dimensional Drawing 68. Maxim Wheatley2014Things to Ask:How can we do it differently?!Whats the biggestcomplication?!Longest Lead-Time Part?! 69. Maxim Wheatley2014 Breadboarding 70. Maxim Wheatley2014 Concept Model 71. Maxim Wheatley2014Functional PrototypeAnd Beyond 72. Maxim Wheatley2014 General Assembly Drawing 73. Maxim Wheatley2014But what aboutsoftware??? 74. Maxim Wheatley2014CAPITALISMCant spell without API ! 75. Maxim Wheatley2014Software ALWAYS in Parallel 76. Maxim Wheatley2014Connectivity Bluetooth (Low Energy)! NFC! SRF (point-to-point radio)! UART! WiFi (TCP or UDP)!! 77. Maxim Wheatley2014Security Concerns Understand how to connect thedata, warehouse it safely, andprocess in a readily scalablemanner (i.e. dont have to migratethings to keep up with needs)! HTTP/HTTPS! Constrained Application Protocol(CoAP)! MQTT 3.1! If leveraging health data, needto be HIPAA Compliant!! 78. Maxim Wheatley2014Factory Checklist Where is everything warehoused? Do we have access to managersand supervisors? Do they have resourcesnecessary?! Do they have partners necessary?! Is everything clean and dry? Do they have scope to scale up ordown?! How quickly can they changeproduction?! Clear payment terms? History with similar products? Prepared to start (capitalizedenough?) Stable management and finances?Sources: Dragon Innovations, and From Concept toConsumer Phil Baker, Experience! 79. Maxim Wheatley2014 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 Wheatley2014Production (continued) Tooling Finalization (Tools get built!) Tooling debugging (in the process) Production-Grade Prototypes (Testing allprocesses) 81. Maxim Wheatley2014Design for Manufacturing:!Make it easy/simple to actually produce!! Reduces costs, mitigates risks, faster, and morereliable! Number of pieces & Ease of assembly influencecosts most significantly! Simpler shapes! Less temperamental materials!! Typically low five figures to mid six figures,manufacturer completes/refines designs to make itmore optimized for construction and assembly! Get literal to estimate process (how long does it taketo put together w/ how many units w/ how manyassemblers?) 82. Maxim Wheatley2014Saving Money: Materials: Investigate Similar Products, DefineProperties, Shop Carefully, Consider KeyFactors! Lifecycle of Tooling and Molds! Reduce the Complications! Appropriately Setting Tolerances (LessTolerance for Failure = More Time & Money)!! Less Assembly, Less Pieces, Less Fasteners! Understand Order Thresholds for Discounts! Reduce Scrap ! 83. Maxim Wheatley2014 Tooling: Tools v. Molds Different Processes, Materials, andLoads Require Different Tooling High-Volume/Quality-Finish =Harder Materials (Steel) Low-Volume/Lower-Quality = SofterMaterials (Plastic, Aluminum,Elastomer, Wood, etc.) Balance cost of low-cost tooling(sometimes higher unit costs) 84. Maxim Wheatley2014Tooling Process five to six figure costs! 50% up front! 50% when ready to roll! Maintain ownership! Mobility of Tooling 85. Maxim Wheatley2014Assembly FixturesThe things we need tomake this work and get itproduced. !!Specific tools, trays,equipment, etc.!Typically: $XXX - $XX,XXX 86. Maxim Wheatley2014 Ramp Up Assembly Process Finalized &Set-Up Assembly Fixtures Finalized andInstalled Instructions Completed Workforce Trained & Prepared Final Testing Prior to Go-Button Production Rate & InventoryRefining 87. Maxim Wheatley2014Because. 88. Maxim Wheatley2014Inventory isFundamentally Evil !!- Tim Cook, CEO of Apple!!! 89. Maxim Wheatley2014Manufacturing Tips Snap-Together/Fastener-Free =Best! Inspection at all stages!! Avoid colors that are easilyvariable and difficult to match! Pre-certified batteries!!! Common components = Good! Ejection ports!! Get it to the factory 90. Maxim Wheatley2014Manufacturing 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 Wheatley2014 Patents Utility: Processes, machines,compositions, articles ofmanufacture, and improvements ofthe aforementioned. What/How itdoes something. Design: Aesthetics that do notdictate function. Provisional: Quick, easy,establishes filing date, best whendone in conjunction with plan to fileproperly. (Patent pending) 92. Maxim Wheatley2014Patents Costs: Time & Money! Defendible?! Policeable?! Makes Sense for Lifecycle?! Relevant?! Patent-Pending isntEnforceable 93. Maxim Wheatley2014Out-Competing Copiers Brand! Design! Marketing! Experience! Customer Service! Warranty! Community! Next Version, Next Product! Software, Software, Software!! 94. Maxim Wheatley2014 Ergonomics Understand users and use-cases Obtain relevantmeasurements dimensions Complete tests with alltypes of users Factors in safety 95. Maxim Wheatley2014Product Testing Testing temperature,running, humidity, shock,vibrations, drop test (w/and w/out packaging)! If emits a frequency of500KHz+ requires FCCtesting (UL) ~2-3 months! $20,000 - $50,000 range! Stress TestingComponents vs.Composite Product 96. Maxim Wheatley2014PricingTotal Direct Costs = BOM +Direct Labor!Direct Labor: Typically ~10% ofBOM!Factory Costs: Typically ~30%of TDC!FC = TDC x 1.3!Overall, consider BOM x 1.5 as agood margin (to include shipping,tooling, logistics, etc.)Source: From Concept to Consumer, Phil Baker 97. Maxim Wheatley2014PricingBOM x 1.5 = ~Final Cost!Final Cost / (1 - Margin %) =Cost to RetailersSource: From Concept to Consumer, Phil Baker 98. Maxim Wheatley2014Source of adafruit.comPricing 99. Maxim Wheatley2014Pssst!Prototypes at productiongrade = ~2x-10x the cost ofnormal production 100. Maxim Wheatley2014 Sales & Marketing Self-Operated E-Commerce = Most Profitable E-Commerce Partners Online Big-Box Retail Big-Box Retail (Approach w/ representatives andstrategize margins and packing in advance.) 101. Maxim Wheatley2014Retail 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 Wheatley2014 Fulfill Assembly Locations Fulfillment Locations Packaging for Retail v. Packaging forWeb Inventory v. Drop-Ship v. Back-Order Prepare for Returns Pick-Pack Systems Leverage Existing Systems (i.e. AmazonFulfillment Centers) 103. Maxim Wheatley2014 Processes Plastic Molding: Thermoplastic (soften w/heat) Thermoset Plastic (harden w/ heat) Electrical Discharge Machining (EDM):Metal cutting process used for metal toolforming Multi-Cavity v. Single-Cavity! Blow-Molding (Extrusion, Injection, Stretch) Thermoforming: Plastic Sheets Heated &Forced Into Cavity w/ +/- PressureSteel Safe: tooldetails that can beadded later withoutadding material to thetool itself.Multi-Cavity UsuallyMore ExpensiveCheck out Mold-TechCorporation 104. Maxim Wheatley2014 Processes Casting: Molten Plastic Compression Molding: Heated MoldForms Shape Extrusion: Heated plastic is forcedthrough a die to create a continuous piece Injection Molding: Liquid Plastic isinjected into a cavity to cool Reaction Injection Molding (RIM):Catalyst & Resin Combined to Create RigidPartWith CompressionMolding, Flash canbe an issue, this addsto costCasting = LowVolume!!Injection = HighQuality FinishEjection Ports &Knit-Lines can beissues 105. Maxim Wheatley2014 Processes Fused Deposit Modeling (FDM):CAD file instructs layered resin Stereolithography (SLA) 3DPrinting! Layered. Slow, not-scalable(usually), highly-detailed.FDM isnt suited forhigh-quality parts orproduction gradeprototypesSpeed, cost, quality,depends heavily onmaterials, machine,and settingsUsually requiressecondary processesto finish/finalize 106. Maxim Wheatley2014 Processes Computerized NumericalControl (CNC) Milling: Metal,plastic, or composites. greatfor functional prototypes. Die-Casting: Molten metalsinto molds with pressure Deep-Draw Stamping: Hollowshapes created by stampingmetal over a moldCNC is slow and canbe expensive for massproductionNeeds low melting-pointmetalUsually requiressecondary processesto finish/finalize 107. Maxim Wheatley2014If youve got a greatproduct, one way oranother, it all works out. !!- Larry Hatch, President of AMTI!!! 108. Maxim Wheatley2014Thanks for making it through!!!!!!This is the presentation I wish Idhad when I began. I hope it servesyou well! 109. Maxim Wheatley2014 Now Go Build Something! 110. Maxim Wheatley2014Recommended 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 Wheatley2014Manufacturing Resources Alibaba GlobalSources.com HKTDC.com iSuppli.com Avnet Octopart Flextronics ProtoMold 112. Maxim Wheatley2014Tools of the Trade Solidworks Autodesk Fusion 360 123D Print 123DApp.com Circuits.io MakerBot Arduino Spark Cores Rasberry Pi