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Sparse's Story Illustrates the Potholes Faced By Hardware Start-Ups 103

Posted by timothy
from the oh-you-wanted-them-in-black? dept.
waderoush (1271548) writes "Hardware is Silicon Valley's new religion. Bits and atoms aren't so different after all, the creed goes; just as the cost and complexity of starting a software company has drastically declined over the last decade, it's now becoming much cheaper and easier to start companies that make physical things. But talk to almost any real hardware company, and you'll discover that the promised land is still some distance away. Sparse, a San Francisco product design startup, learned that the hard way. The company raised $66,000 on Kickstarter for its uber-cool theft-proof bicycle lights, but it took more than a year to deliver the first units to backers, thanks to a string of unforeseen manufacturing and supply-chain snafus. 'We had all the t's crossed and all the i's dotted and still there was a big daily surprise,' says industrial designer Colin Owen, Sparse's co-founder and CEO. Today Sparse is shipping and profitable, with a vision to 'change the face of mobility' for urban cyclists, but its story illustrates just how high the bar still is for aspiring hardware entrepreneurs. Says Owen: 'I wish there was more of a handbook for these things, but the biggest hiccups were very localized and unpredictable.'"
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Sparse's Story Illustrates the Potholes Faced By Hardware Start-Ups

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  • One year (Score:5, Insightful)

    by drolli (522659) on Friday June 06, 2014 @08:19PM (#47184271) Journal

    from "no company" to "company delivers a product to customers" is not bad at all.

  • Concentration (Score:4, Insightful)

    by dbIII (701233) on Friday June 06, 2014 @08:30PM (#47184323)

    thanks to a string of unforeseen manufacturing and supply-chain snafus

    That's why China already owns the USA's ass in manufacturing. There are too many holes in the manufacturing capability now while in China the place to make that other thing is just down the road - like it used to be in the USA.

    • by tomhath (637240)
      The lights are made in China.
      • Re:Concentration (Score:5, Interesting)

        by spiritplumber (1944222) on Friday June 06, 2014 @08:42PM (#47184379)
        I'm going the "100% made in the US" route for my crowdsourced thing.... wish me luck!

        http://igg.me/at/minilaser/ [igg.me] If you want a cheap laser cutter.

        • by horm (2802801)
          Out of mod points. Legitimately impressed.
        • by citizenr (871508)

          no, you are going "100% sourced in USA" from a guy who gets M140 diodes and the rest of the stuff from china.

          • Where does it stop though? I mean, do I have to mine the silicon and copper, make the wafers, etc. in the US?

            I get parts from the open market and build something that is more than the sum of its parts. The PCBs are made here (But, where is the copper mined? where is the solder mask stuff made? etc.), assembled here (but where does the solder come from?), the machining is done here (but who mined the alluminium and made the extrusions, and where?), and the plastic parts are printed here (but where does the

      • by dbIII (701233)
        Co-ordinated from the other side of the planet - hence my point!
    • by Ol Olsoc (1175323)

      That's why China already owns the USA's ass in manufacturing.

      China Owns America's ass in manufacturing because their Guvmint heavily subsidizes it.

      • by Anonymous Coward

        How? and why? Their manufacturing accounts for something like 80% of GBP, what would they subsidize it with?

        They keep their currency artifically low & they allow for huge inbalance in trade by buying gazxillons of dollar bonds. But you do realize you have to pay them eventually. Sooner or later China finishes preparing (they buy tons of gold right now), and say "check". You believe that USA will be able to pay all that bonds? Riiiight.

        • by tomhath (637240)
          They subsidize new markets to kill competition. Once they have a monopoly they raise prices to subsidize another market entry. It'll work for a while, until other cheap manufacturing that doesn't require a lot of almost free labor is available.
      • Re:Concentration (Score:4, Insightful)

        by TheGratefulNet (143330) on Friday June 06, 2014 @09:51PM (#47184671)

        and because environmental and human safety does NOT MATTER in china. people die? who cares. air can't be breathed? who cares. but hey, they are selling walmart shit to us and so, wow, go china, go! ;(

        • Please stop spouting bullshit like this. Where did you read it, Huffington Post? China isn't like what you think it is. Frankly, it's racist to say that people can't care about the environment because they're Chinese. There are protests all the time and these things do have an effect.

          You can't expect people to take what you're saying seriously if your argument is "Walmart blaaarrrgh!"

          • by BitZtream (692029)

            China doesn't care about its people because it has too many of them. Life is cheap, much like India. It has nothing to do with race and everything to do with culture.

            They have way too many living beings so no one cares what happens to a few.

            • No, you are wrong. Stop saying it. You are a racist piece of trash, and I can only hope that you and your kind are thrown on the ash heap of history along with your buddies in FOX News.
    • by TubeSteak (669689)

      There are too many holes in the manufacturing capability now while in China the place to make that other thing is just down the road - like it used to be in the USA.

      Manufacturing is coming back to the Americas (North/Central/South) specifically because of problems mentioned in TFA

      But Sparseâ(TM)s manufacturing partners there initially had trouble making the die-cast metal parts to the right tolerances, and there was a high rejection rate for units with the silver finish.

      âoeI really care about making things perfect, and it takes a certain amount of time to solve things when the problems crop up and the information has to filter up the supply chain,â Owen says. âoeIt can take you a week to see if they are shipping the same part you presented to them.â

      Problems like those can still happen with local manufacturing, but they get noticed and resolved in days, not weeks.

      • by dbIII (701233)

        Problems like those can still happen with local manufacturing, but they get noticed and resolved in days, not weeks.

        Once again, an example of my point. A concentration of industry and the designers having access to the process line/s makes a massive difference. Selling the farm to China, Mexico etc removes those advantages.

    • We're still number 2 in the world in manufacturing, so perhaps its a bit of an exaggeration to say they "own us" in that category. The idea that our manufacturing sector is in shambles is a myth.

      • Pick a field outside of the military (or even inside the military with rocket engines coming from Russia) and it is a shambles, especially with computer and electronic equipment. Try getting something done with a "US" manufacturer when there is a holiday in China or a big snowstorm over there and you'll see exactly how much of a shambles it is. Not a complete failure but some stupid outsourcing choices have removed a competitive edge and some industries have to rely on government enforced trade barriers t
        • Pick a field outside of the military (or even inside the military with rocket engines coming from Russia) and it is a shambles, especially with computer and electronic equipment.

          mac pro made in america. moto made in america. model s made in america. prediction, 10 years more than half of apple's stuff will be made in america.

          • by dbIII (701233)

            10 years more than half of apple's stuff

            As I wrote, treading water :(
            Hopefully that outlier will become a trend and hopefully it will take less than ten years while some electronics industry still exists in the USA to take up the work.

            • dude, america's back. we're the factory of the world. apple is just the start. they have the money to overcome the first hurdles, then we start to have a growing trained expert workforce. america you get high technology high quality products mostly automated by robots.
              • by dbIII (701233)
                I wish you were correct instead of overconfidently deluded.
                • heavy manufacturing is the cornerstone of the nation. can't spell america without "I", "me", and "a car"
                  • by dbIII (701233)
                    Heavy manufacturing in the USA has been utterly fucked over by a mismanaged steel industry on government life support that has forgotten how to stand on it's own. That has forced serious costs on other industries and started the avalanche of manufacturing industry departing offshore in the first place some decades back. Electronics is a late departure but most of the heavy stuff left the building about when Elvis did. Think about things like shipbuilding, mining equipment, trains etc - all stuff that use
        • by packrat0x (798359)

          Fifteen years from now those Chinese made parts will be manufactured in Africa and SE Asia.

  • For all the marketspeak and fancy looks they're still asking $140 for a 200 lumen light. That's about a half step above terrible. The light I use, which is pretty much the minimum brightness I would consider safe as a "see" and not a "be seen" light, is 900 lumens.

    • In fact, they charge money for a device making light, who needs that? We have a fusion reactor in the center of our solar system that delivers us with light. So why pay money for something you get for free?
      (Sorry had to make this stupid comparison)

      Its about the marketing, not about the hard numbers. Do the people buy apple hardware because there is no cheaper alternative, or the storage-capacity is the cheapest?

      When you buy a device, you not just buy the specs, you purchase a bunch of things, as the brand,

      • Do the people buy apple hardware because there is no cheaper alternative

        Correct. There is no cheaper alternative to play books, videos, and apps with Apple DRM, except perhaps an as-is previous-generation device from a pawn shop. And when the iPhone and iPod touch first came out, iTunes Plus hadn't landed yet, and people wanted a phone compatible with their library of FairPlay DRM purchases from what was then called the iTunes Music Store. Finally, the iPhone arrived roughly a year before the HTC Dream, and the iPod touch had a four year lead over Samsung's Galaxy Player, givin

      • In fact, they charge money for a device making light, who needs that? We have a fusion reactor in the center of our solar system that delivers us with light. So why pay money for something you get for free?

        You jest, but my bike's headlight is a Harbor Freight LED flashlight that I got for free (with a coupon).

    • What 900 lumen light are you using?

      I've got a couple 900 lumen lights and they're bright enough that if I shine them at cars the drivers are mildly upset about the brightness. It's like hitting them with high beams (although not covering as much area as a headlight).

      I agree 200 lumens and the down-facing output is strange. I expect this is for urban riders who mostly use the streetlights to see.

      • One of the older magicshines I've had for a while. 900 lumens is closer to a regular headlight than highbeams, which can be into the thousands of lumens over a much larger area. As for bothering people... it's a headlight, it's SUPPOSED to be that bright. That's why you angle them down a bit.

  • by BaronM (122102) on Friday June 06, 2014 @08:32PM (#47184333)

    I was thinking "looks good", until I saw that this setup uses a dual-headed USB charger that sure looks designed for indoor use only. I'm fine with a fixed battery in my cell phone, tablet, and even laptop, but my bike a) lives outdoors and b) need to accept a spare battery because working lights can be a life-or-death matter.

    Nice design, but seriously deficient function.

  • by spiritplumber (1944222) on Friday June 06, 2014 @08:40PM (#47184367)
    I have the same problem -- my kickstarter hit 200% and I was not ready for it. So I am having to scale up.

    The good thing is that my supply chain was already in place, so all I had to do was increase quantities. I did, however, have to design a simple machine (a jig, basically) to semi-automate a task I had intended to do by hand.

    http://igg.me/at/minilaser/ [igg.me] if anyone cares.

    • Basically I had to build a couple of simple machines to let me make stuff in series:

      https://www.youtube.com/watch?... [youtube.com] This is what I use for the machining.
      https://www.youtube.com/watch?... [youtube.com] This is how I get the 3D printer to just keep going (I am going to be selling this as a kit too).

      This is an integral part of engineering a product to me - you can't just make a prototype and send the drawings "off in the cloud" to be made. I mean, I guess you can, but then how can you be sure that it was made well? Se

  • by erice (13380) on Friday June 06, 2014 @08:49PM (#47184411) Homepage

    Hardware is Silicon Valley's new religion. Bits and atoms aren't so different after all, the creed goes; just as the cost and complexity of starting a software company has drastically declined over the last decade, it's now becoming much cheaper and easier to start companies that make physical things. But talk to almost any real hardware company, and you'll discover that the promised land is still some distance away.

    No. Hardware is Silicon Valley's founding religion. Software came later and now real hardware startups can not get funding. Sparce's experience shows that even if your development is trivial (no significant R&D) and you don't do any of the manufacturing yourself, it can still be a bumpy road to selling product.

    I see no evidence that this is improving. All that has happened is that ambitious hardware startups no longer happen and people are getting excited over hobby scale development that didn't use to make the news. Well, to be fair, Kickstarter has allowed "super hobby" scale developments to take off that used to fall into a no-man's land. They were too small to form a viable business around and yet too big for a couple of guys to pull off in their spare time. Still, this is nowhere near a hardware renaissance. The promise land is not just some distance away. There is little evidence that we are going there.

  • I've backed a bunch of projects on Kickstarter and Indiegogo. A few completed in the time they expected, most didn't. It didn't bother me that they were late, it bothered me they didn't take this kind of stuff into account when setting expections with the backers.

  • Our hardware (also software heavy) start up was recently acquired for an exponent of our annual gross revenue. The company started ~18 months ago, and we went from idea to Indiegogo to shipping in 12. ALL MADE IN NORTH AMERICA (sure some components were sourced from Asia but design and assembly all in NA). I've done harder things in my life.
    • Our hardware (also software heavy) start up was recently acquired for an exponent of our annual gross revenue.

      What does that mean? Exponents go negative, so you're basically saying that it was acquired for the annual gross revenue multiplied by a numer between epsilon and infinity.

    • Our hardware (also software heavy) start up was recently acquired for an exponent of our annual gross revenue.

      hopefully the gross revenue was >> 0 and the exponent was > 1

  • by TheGratefulNet (143330) on Friday June 06, 2014 @09:49PM (#47184663)

    uhm, who writes this tripe?

    SILICON VALLEY has always been about hardware.

    where do you think the word 'silicon' comes from?

    sheesh.

    #include <stopped_reading_there.jpg>

    • I hadn't thought about it when reading the submission and web page link. But that is true, isn't it?

      Thanks for cracking me up. :^)

  • I misread that. I was hoping this was a startup that had some innovative, cheap way to repair potholes. Some of us have to deal with [cleveland.com] some really awful potholes [google.com] even in June, well past the end of winter [wikipedia.org].

  • $160.00 for an over-designed, under-powered, pretty light made out of a couple of pieces of stamped metal, a lens, and some LED's???

    Wow... Hipster bicycle wanks are even bigger suckers than Hipster cult of the Mac wanks...

    Oh... Wait. My bad - subset of the same Hipster wank crowd. Carry on.
    • Besides that, how "theft-proof" is it really, if the thief just have to be able to take the seat/post out of the frame? A couple of my bikes, back when I still rode bikes, had the quick-set levers on the top of the upright tube, to make it easy to set the height of the seat. This light would make stealing my seat worth $70 more.

      As for bikes without the quick-set levers, a set of tools to adjust that same opening isn't that hard to come by, or difficult to use.

    • by tomhath (637240)
      It's not turning a profit. Buried in the article is the fact that none of the employees are getting paid. The "profit" would turn into a six figure loss if they accounted for all of their costs.
  • 'We had all the t's crossed and all the i's dotted and still there was a big daily surprise,' says industrial designer Colin Owen...

    I'll assume Mt. Owen is just inexperienced, and not outright delusional. There are no inherent problems with hardware manufacturing supply lines that experienced managers can't compensate for. If one vendor flakes, you buy from the second or third source you already lined up. In advance, because you are not stupid/inexperienced/delusional.

  • by Anonymous Coward

    The fact that people here are surprised by these "unexpected difficulties" is highly telling.

    In the virtual world - which is all the data within any properly functioning computer - one thing is made true by design which isn't true of the real world.

    It's very, very simple! *Entropy is conserved*.

    IE: Within the computer, things stay exactly where they're left. Nothing degrades, bits stay exactly as they are. (abeit RAID 5 may "lose" one every ~100TB or so).

    What this means, is that the second law of thermodyna

  • by statemachine (840641) on Friday June 06, 2014 @10:33PM (#47184831)

    The summary made it sound like an electronic hardware startup, and the difficulties behind competing with the bigwigs like IBM, AMD, Intel, Cisco, Apple, etc.

    No, it's click-bait.

    As nice as a bicycle headlamp is (that will still be stolen -- thieves don't use normal tools, and they're usually supporting a drug habit), the article didn't even talk about manufacturing in Silicon Valley, or even San Francisco (which is 45 miles north), and they had no unoriginal issues with certifications in other countries. I'm voting this article down. Re-submit with an accurate summary next time.

  • by Animats (122034) on Saturday June 07, 2014 @02:38AM (#47185345) Homepage

    Too many of these supposed "high tech hardware startups" are producing the kind of crap that came from China two decades ago and Japan four decades ago. Bicycle lights. iPhone cases. Even the Raspberry Pi and the Arduino are just PC boards stuck under systems on a chip made in China. This is not high tech.

    There were some guys at TechShop last year making a plastic gizmo for attaching an iWhatever to a an auto dashboard. They had a big "Made in Silicon Valley" poster. I felt they were embarassing Silicon Valley.

    We need to do better than this.

    • by AmiMoJo (196126) *

      The point of the Pi and Arduino is not so much the hardware as the support and community. The hardware for both is trivial, especially the Pi which is literally the minimal reference design from the datasheet. Before they came along the was no standard low cost platform for Linux and microcontroller development that was as easy as Lego to get started with.

      These days hardware is usually the easy part, it's what you do with it that counts.

    • I agree that we need to do better, but the funding for hardware startups isn't there. The risks are perceived as being too great, and long gone are the days when someone builds an Apple I in their garage. I thought the Novena laptop was a good step in the right direction, but that clearly demonstrates the challenges involved when competing with hardware designed at scale. Software is just so much more accessible and cheaper to build.

  • From the article:

    the biggest hiccups were very localized and unpredictable.

    What a surprise.

    The things you anticipate are those that you predicted and prepared for. It is always the unpredicted ones which cause hiccups.

    In the end, you cannot prepare for all eventualities, but you must budget for a number of them that will hit you, even when you cannot say precisely in advance what or when they will be. If you don't, your project will come in late and over budget.

  • by evilviper (135110) on Saturday June 07, 2014 @07:54AM (#47185745) Journal

    TFA is 20 full-screen pictures of their product, and page after page of copy about how awesome the product is. Only barely a mention of some minor hiccups, that get treated as an industry problem, rather than the realities of an incompetent start-up that simply didn't know WTF it was doing.

    And frankly, $140 for a set of 'sleek' bicycle lights makes me want to go on a killing spree.

    Buy a couple 3-mode SK68 lights for $5/ea. Brighter than you could ever want, with high/low/strobe, and multiple zoom settings:

    http://www.amazon.com/dp/B006E... [amazon.com]

    Some $2 bike mounts:

    http://www.amazon.com/dp/B00AD... [amazon.com]

    And if you don't want to cut-out some red cellophane to fit, you can get a kit with red lens for the tail light:

    http://www.amazon.com/dp/B0000... [amazon.com]

    Batteries and Charger, < $13:

    http://www.amazon.com//dp/B004... [amazon.com]

    http://www.amazon.com/dp/B004N... [amazon.com]

    • by jimicus (737525)

      Only barely a mention of some minor hiccups, that get treated as an industry problem, rather than the realities of an incompetent start-up that simply didn't know WTF it was doing.

      I tend to agree with you on that one. The PSU was refused certification in the EU three times? How the hell is that even possible? The damn things use a USB charger, I cannot believe you can't just buy one off the shelf in bulk at a decent price that has already been through all the international certification process.

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