3 ways to save money when creating a technical device
Creating any new technology product is an expensive process. This is even more true for the device, especially a high-tech product. According to the website Entrepreneur, the average cost of developing a new device and its working prototype can reach $ 10 thousand.
If the product is relatively complex, the cost of its development will result in twice the amount. In most cases, the financial costs of product development and development fall entirely on the shoulders of the entrepreneur, so finding ways to save money at this stage is a very important task that requires a creative approach.
For a start, it is worth understanding that having a working prototype significantly increases the likelihood of obtaining external funding. Isn't "brilliant" idea enough, you ask? Unfortunately no. Most investors want to see with their own eyes the evidence of serious intentions on the part of the entrepreneur, and there is nothing more serious than a real working prototype.
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Based on these prerequisites, the importance of device prototyping becomes obvious for all entrepreneurs, especially for those whose budget is very limited. Paradoxically, but a limited budget makes it necessary to spend money on a prototype in order to use it as proof of its concept and attract external financing.
John Thiel (John Teel) advises to stick to three points to save money.
There are a number of electronic modules made for integration into other products. Today, modules are available that perform a variety of functions, from Bluetooth to video encoding. Most technological devices, as before, require the development of circuit solutions, but if you can save money by using already developed hardware modules, then why not.
If we consider the wireless functionality, we should not lose sight of the fact that such devices require additional costs for certification.
In the states, a device that does not use wireless functions is classified as an unintended emitter and its certification costs only about $ 1000. A device using a wireless network is a deliberate emitter and is certified more expensive, about $ 10 thousand.
When designing products that use Bluetooth, you can join the Bluetooth Special Interest Group (SIG) by paying an additional fee of $ 8,000. Membership in this organization provides additional features, such as using the protected Bluetooth protocol in new devices.
Here, also at the initial stage, it is advantageous to use the developed and debugged modules that have passed certification. Thus, the need to join the Bluetooth SIG is eliminated, reducing costs.
Despite all the advantages of using modules, this path has its own drawbacks. Reducing the cost of development leads to an increase in the cost per unit of product, so that the possible profit will be reduced. Although if you use ready-made modules only at the initial stages, and upon reaching significant production volumes, switch to a complete individual design, you can level the disadvantages of both approaches.
The second significant disadvantage may be inappropriate sizes of finished modules. The development of ultra-portable devices does not allow the use of any ready-made modules, they can be too large, but I repeat that even the most seedy and awkward working prototype is much better than the coolest model on paper.
A co-founder is generally a great advantage for a startup, especially when the founders possess a number of complementary skills. For example, a marketing specialist and a design engineer together will make an ideal startup team; if you add a person who is financially knowledgeable to a third cofounder, then you can get a dreamteam at all.
A co-founder with engineering skills, or at least the ability to acquire them, will seriously help save significant amounts on product design and development. If we estimate, then about 85% of the cost of developing a new product falls on engineering costs. Therefore, an engineer in a team can save a tidy sum in the long run.
Another advantage of having a co-founder is that the asset represented by the team attracts investors more easily, especially if the skills of its members complement each other.
Adam Callinan from Beachwood Ventures summarizes his article : “If something happens to a single founder, both the company and the investments made in it go to the dog's tail. Therefore, with a sober calculation, significant investments in such companies are too risky and a normal investor will most likely just give up on those ”.
It may seem a little strange, because the engineering staff is expensive, so why is it worth hiring a few engineers if you are trying to save money? The explanation is that the specialization of engineers dictates a different amount of payment, so the circuit engineer will certainly be more expensive than an engineer who specializes in 3D graphics. In some cases, many engineering tasks are outsourced, which in turn increases costs. If, instead, you hire and control various engineering personnel, there is the possibility of reducing such costs, while obtaining a better result with better control and integration.
In any case, there are no ready-made solutions to guaranteed cost savings; accordingly, any measures of this kind require scrupulous and scrupulous counting, which will show the expediency of certain movements.
UPD
A free book by John Thiel on the production and sale of technological devices (English).
If the product is relatively complex, the cost of its development will result in twice the amount. In most cases, the financial costs of product development and development fall entirely on the shoulders of the entrepreneur, so finding ways to save money at this stage is a very important task that requires a creative approach.
For a start, it is worth understanding that having a working prototype significantly increases the likelihood of obtaining external funding. Isn't "brilliant" idea enough, you ask? Unfortunately no. Most investors want to see with their own eyes the evidence of serious intentions on the part of the entrepreneur, and there is nothing more serious than a real working prototype.
')
Based on these prerequisites, the importance of device prototyping becomes obvious for all entrepreneurs, especially for those whose budget is very limited. Paradoxically, but a limited budget makes it necessary to spend money on a prototype in order to use it as proof of its concept and attract external financing.
John Thiel (John Teel) advises to stick to three points to save money.
Use existing electronic modules, especially if wireless functions are planned.
There are a number of electronic modules made for integration into other products. Today, modules are available that perform a variety of functions, from Bluetooth to video encoding. Most technological devices, as before, require the development of circuit solutions, but if you can save money by using already developed hardware modules, then why not.
If we consider the wireless functionality, we should not lose sight of the fact that such devices require additional costs for certification.
In the states, a device that does not use wireless functions is classified as an unintended emitter and its certification costs only about $ 1000. A device using a wireless network is a deliberate emitter and is certified more expensive, about $ 10 thousand.
When designing products that use Bluetooth, you can join the Bluetooth Special Interest Group (SIG) by paying an additional fee of $ 8,000. Membership in this organization provides additional features, such as using the protected Bluetooth protocol in new devices.
Here, also at the initial stage, it is advantageous to use the developed and debugged modules that have passed certification. Thus, the need to join the Bluetooth SIG is eliminated, reducing costs.
Despite all the advantages of using modules, this path has its own drawbacks. Reducing the cost of development leads to an increase in the cost per unit of product, so that the possible profit will be reduced. Although if you use ready-made modules only at the initial stages, and upon reaching significant production volumes, switch to a complete individual design, you can level the disadvantages of both approaches.
The second significant disadvantage may be inappropriate sizes of finished modules. The development of ultra-portable devices does not allow the use of any ready-made modules, they can be too large, but I repeat that even the most seedy and awkward working prototype is much better than the coolest model on paper.
Find a partner engineer
A co-founder is generally a great advantage for a startup, especially when the founders possess a number of complementary skills. For example, a marketing specialist and a design engineer together will make an ideal startup team; if you add a person who is financially knowledgeable to a third cofounder, then you can get a dreamteam at all.
A co-founder with engineering skills, or at least the ability to acquire them, will seriously help save significant amounts on product design and development. If we estimate, then about 85% of the cost of developing a new product falls on engineering costs. Therefore, an engineer in a team can save a tidy sum in the long run.
Another advantage of having a co-founder is that the asset represented by the team attracts investors more easily, especially if the skills of its members complement each other.
Adam Callinan from Beachwood Ventures summarizes his article : “If something happens to a single founder, both the company and the investments made in it go to the dog's tail. Therefore, with a sober calculation, significant investments in such companies are too risky and a normal investor will most likely just give up on those ”.
Hire several engineers at once.
It may seem a little strange, because the engineering staff is expensive, so why is it worth hiring a few engineers if you are trying to save money? The explanation is that the specialization of engineers dictates a different amount of payment, so the circuit engineer will certainly be more expensive than an engineer who specializes in 3D graphics. In some cases, many engineering tasks are outsourced, which in turn increases costs. If, instead, you hire and control various engineering personnel, there is the possibility of reducing such costs, while obtaining a better result with better control and integration.
In any case, there are no ready-made solutions to guaranteed cost savings; accordingly, any measures of this kind require scrupulous and scrupulous counting, which will show the expediency of certain movements.
UPD
A free book by John Thiel on the production and sale of technological devices (English).
Source: https://habr.com/ru/post/291874/
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