As a founder of https://www.opendesk.cc I think all startups should consider local manufacturing -- when they're fitting out their work space.
Hardware startups should consider local manufacturing
61–70 of 94 posts
Re: Hardware startups should consider local manufacturing
#62I have backed a half dozen Kickstarters and Indigogos that were hardware based (consumer electronics) and chose to manufacture in China. Seeing the time and money they spend in order to fly someone over to China to troubleshoot and issue with manufacturing or testing has left me wondering - why do small startups choose to manufacture in China to begin with? > Is it because they assume that despite the initial cost ov…
Some of it is small timers trying to make the big time. Something that makes sense economically for me as a hobby would be interpreted as economic suicide for a goal oriented company. Can't run a business like a hobby.
For example, say I order PCBs from China. Takes seemingly forever, but thats OK, I can hang out with family and play minecraft or post on HN. For a hobby that's fine, especially if I save $50. For a company thats economic suicide if you lose 4% of your annual combined salaries waiting for delivery of a prototype. Even financially, dropping your revenue per year might be more expensive than just paying an extra couple percent to the locals.
Another typical smalltimer way of thinking is I make a mistake on a PCB, who cares, its the rare PCB that can't be fixed with some cut-n-solder by hand. That solution doesn't work on a qty 5 figures production run. You'll get much better cooperation with locals, which is irrelevant if your time is free and quantities are single to double digit, but is crucial once you reach consumer kickstarter type scales. Maybe one way to phrase it is problems at the single digit quantity level are interesting anecdotes or minor customer service challenges, but problems at the 10K level are disasters, and problems don't happen at the 10M level because the cost of your onsite overseers stationed in China rounds down to zero per device.
Re: Hardware startups should consider local manufacturing
#63Totally agree with this. Have a friend who had a successful kickstarter and decided to go with China - he shipped a year late after spending most of his time in Shenzen and going through multiple suppliers. In the interim, they lost the first mover advantage and there are now multiple similar products on the market. If you're not already well established and making a massive amount of something, it's a really bad idea to outsource.
Re: Hardware startups should consider local manufacturing
#64I have backed a half dozen Kickstarters and Indigogos that were hardware based (consumer electronics) and chose to manufacture in China. Seeing the time and money they spend in order to fly someone over to China to troubleshoot and issue with manufacturing or testing has left me wondering - why do small startups choose to manufacture in China to begin with? > Is it because they assume that despite the initial cost ov…
My guess would be that it starts with the assumption that "China is cheaper", and that makes for an easy story to tell to investors "we're making XYZ in China!". The second you say "we're making it in Texas", it opens you up to questions of "isn't that expensive?" On the face of it, I'm sure the up-front quote from a Chinese manufacturer is cheaper than something in the USA. Where costs skyrocket is when something go…
> there are all sorts of fun import tariffs and such to deal with (at least on the US side)
Hopefully some free trade agreements help eliminate blockages like this in the future.
Re: Hardware startups should consider local manufacturing
#65On the electronics side we (https://circuithub.com/) have spent a lot of time on automation to bring US manufacturing costs inline with China.
I definitely agree with the premise of the OP, local manufacturing has a lot of benefits.
Re: Hardware startups should consider local manufacturing
#66If you haven't heard of Schiit, it's a fascinating story of a small company that builds high end and low end headphone amps/dacs, for much less money than competitors. In CA.
One of the two founders wrote an online book about it here:
http://www.head-fi.org/t/701900/schiit-happened-the-story-of...
Re: Hardware startups should consider local manufacturing
#67What exists to help entrepreneurs find/pair up with manufacturers locally/domestically? Opportunity there?
I work for a US manufacturer (non-tech related), and we frequently get inquiries from folks about making their products. We are primarily focused on producing our own products, but it is nice to fill gaps in production and explore new partnerships. But we don't actively pursue this, and I have no idea how they find us. WOM and random online databases, is my guess.
Re: Hardware startups should consider local manufacturing
#68I read the story how "Schiit happened" the other day and the last part of chapter 8 also touched this subject:
http://www.head-fi.org/t/701900/schiit-happened-the-story-of...
Re: Hardware startups should consider local manufacturing
#69I'll add one word of caution, I've looked into getting a product made that had a textile component and a separate product that had a leather component. Precision, automated stitching is either totally absent or completely unaffordable in the US. There are great shops India and China that can do laser cutting and CNC stitching super cheaply and if you want to make an inexpensive product to tight tolerances this is exa…
Read your own comment.
You're basically saying that laser cutting and CNC stitching - operations performed by robots based on files uploaded by computers - are done better in China than here.
That's like someone in China saying that we are better at standing. People on both sides of the ocean probably do just fine at both. ;)
Re: Hardware startups should consider local manufacturing
#70If you haven't heard of Schiit, it's a fascinating story of a small company that builds high end and low end headphone amps/dacs, for much less money than competitors. In CA. One of the two founders wrote an online book about it here: http://www.head-fi.org/t/701900/schiit-happened-the-story-of...
There's the minor issue of them not actually testing their designs perform as expected, at least one amp damaging some people's headphones as a result, and them denying the issue existed: http://nwavguy.blogspot.com/2011/07/banned-at-head-fi.html Though that's not really a problem with manufacturing in the US, it's more of a general audiophile industry problem.