Moving on from an internet of things prototype to a product: a to-do list.
The internet of things has been driven forward by startups who start out as hackers and inventors, people who come to Designspark, looking to get something made once, to scratch an itch. What if you get such great feedback around you, you decide to take things forward? How do you move from a one-off made using an Arduino or Raspberry Pi to a fully-fledged commercial product? Here’s a list of what you need to think about and who you can reach out to for help if you’re in the UK.
The IP/investor loop
If you think you will need investment moving forward, you may have to deal with investors. Whether they are ‘seed’ or ‘angel’ investors or even venture capitalists (‘VCs’) they are bound to ask you if you have protected your idea. This means that you need to register the design, secure a trademark in different geographies or have a patent pending approval. These are all very different processes that have very different timelines of protection and different costs too. You can consult the Intellectual Property Office for more details. The British Library also has a terrific Business & IP Centre with support for early stage inventors.
This seems like something a bit complicated to think about early on, but the second you make a website or publish an idea you may not be able to protect it if someone copies it. Kickstarter campaigns for examples have exposed the ideas of small companies to a global market and without protection, their idea maybe copied much more quickly than you’d imagine.
Design for manufacture
The second thing an investor will ask you is how much your product costs at scale. To figure this out, you need to start with a really good Bill of Materials (BoM). This is a spreadsheet that helps you break down all the fixed costs associated with selling your products (electronics, enclosure, packaging). This is the most important document your will constantly be relying on moving forward.
Dragon Innovations has a great one you can use for free. You will then use your total cost in a broader financial spreadsheet you can get by attending Johnny Martin’s finance class for a mere £30. It’s an amazing course I followed a few years ago and would really recommend.
If you’ve been playing with the Arduino, the electronics part of the BoM won’t surprise you much, but product design for the enclosure is another kettle of fish. Forget about using 3D printing, you’ll have to go to some more advanced manufacturing techniques such as CNC or injection mounding if you’re dealing with plastic. At this stage, I’d recommend working with an industrial design professional to scope the work (Tom Ballhatchet and Duncan Fitzsimmons are both great) or a small studio like Map project Office. This will help you think about timelines and also how much money you should be raising with investors. You can of course decide with a graduate student, but their lack of manufacturing expertise will be a problem very soon especially in scoping your costs at scale. Check out the New Designers every year if all you want is to hire a young graduate who will help you with the 3D modeling of your product. Moving forward you may want to start to think about manufacturing in Europe and China. RPD and Koobe Global are great companies who can help you to think about how to plan for that transition. Ideally that is a conversation you start to have after you have made your first batch of products locally and learnt from that process. Josh Lui from Koobe wrote a great article about this transition. PCH will help you think about building a supply chain that makes sense once you’re ready to go abroad for your manufacturing.
All of these companies should be approached early on so you can build up a realistic profile of your product journey from making 10 to making 10 thousand. On the electronics side along, Mint-tek recommends planning for 3 rounds of prototyping before your product is ready for manufacturing.
Once all your financial projections are in place for the first 3 years of your business you can reach out to investors and meet with them. I have assembled a to-do list to prepare you for those meetings and a list of funds that are still around.
Your team, your time
When you’re starting something exciting like a connected product startup, it’s important to think about who might work with you and how much time you’d like to allocate to this. Quitting your day job is a big step and I wouldn’t recommend doing that too quickly unless you are already working for yourself and you can work on this on the side. It may take up to 2 years before you are covering enough of the production costs and can afford to pay yourself too.
A good starting team is comprised of (full time, part time or contractor)
- A backend developer
- An electronics engineer
- An embedded software engineer
- A product designer
- A marketing / sales / partnerships lead
With these basic competencies you’ll be able to get your prototype redesigned for manufacturing and make enough units to test with beta customers while getting potential partners excited about working with you. As the founder, you can of course occupy any of these roles, but you’ll have to replace yourself pretty quickly if you’re not in charge of sales, marketing and partnerships. This can seem disarming, but the founders I know are always in meetings, not making. They make things happen in different ways.
Once you have assembled this motley crew, you may choose to apply to an incubator or accelerator to spend a more dedicated period of time on the product development and figuring out if the team dynamics will last. This is important as chances are you’ll be building a business together for 3-5 years. In the UK, here are some of the programs you can apply to:
Don’t apply to an incubator until you have a BoM, a list of potential partners and a team. An incubator generally doesn’t offer you a lot of breathing space, so you need to go in already prepared. It may sound hard, but it’s a fantastic adventure to take on these days and really rewarding. As someone who has built a business in the UK making a connected product for global families I can tell you it couldn’t be easier these days to get involved and find success.
If you want to talk to others about your journey, remember there are IoT meetups across the world where you can meet your potential co-founders, partners and investors. Good luck!