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EPS 023 – Bring it to Market with John Teel of Predictable Designs


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This week’s talk is with John Teel, the founder of Predictable Designs.  In this show we talk about what it takes to bring an Arduino prototype to market.  What are the steps, how hard is it, is it realistic – all these types of questions…  I hope you enjoy the show – I think you’ll learn a lot, I know I did.

More about Predictable Designs:

Predictable Designs helps entrepreneurs, startups, makers, inventors, and small companies develop electronic hardware products in a predictable fashion is our goal.

They help develop products with a wide variety of functions such as microcontrollers, Bluetooth, WiFi, cellular, GPS, NFC, accelerometers, power harvesting, battery charging, sensors, transducers, motors, wireless charging, displays, audio, and video.

You can check out a great article on their website that might be relevant to you called:

From Arduino Prototype to Manufacturable Product

 

Transcript:

Michael:                 Hello. This is Michael with Programming Electronics Academy I hope you’re doing fantastic. We’ve got a really cool show this week. But first, I have a question, have you ever messed around with Arduino or even if you ever messed around Arduino, have you ever had an idea for some type of product and you’re like, Oh, this would be so cool”. I feel like all of us have ideas like that, but how do you actually bring something from your idea into reality. How do you actually bring something to market.

Well, we’re going to talk about that question today with our guest John Teel. He’s the owner of a company called Predictable Designs and what they do is they help makers, inventors, entrepreneurs people with an idea to predictably bring a product to market. We approach this from a place where I think you might be, where you’re just kind of figuring out programming or maybe you’re versed in programming or maybe just getting into electronics or maybe your versed in electronics but kind of from the designer piece of it, from the end user point of view.It’s actually really a interesting talk, I think you’re going to enjoy it. So without further ado, let’s go ahead and jump right in.

Hey John, thanks a ton for joining me today, I really appreciate it.

John Teel:              Hey Michael, how’s it going? I’m glad to be here. Thanks.

Michael:                 It’s going pretty good. Just enjoyed a wonderful Thanksgiving.

John Teel:              Oh that’s great. That’s great. Yes. Some time off is always nice.

Michael:                 I know. Is it ever really time off? I feel like I’m always working a little bit. I don’t know.

John Teel:              Yeah, me too. My brain is always going so …

Michael:                 So John, we were just talking and you mentioned that you’ve been running Predictable Designs for about two years now. And I’d like to hear a little bit about the company, and I’d also like to hear a little bit about how you got to making this company .

John Teel:              Well, the company Predictable Designs, my focus is helping hardware startups, entrepreneurs makers, inventors successfully bring a new product to market, specifically an electronic product. So that’s kind of my strength is I … because I’ve been both sides of the equation. Most of my life, since I was a kid, I was pretty much born to be an engineer. So, I’ve been an engineer for a long time, but I’m also an entrepreneur.

I developed my own product, had it manufactured in China. And at one point, it was selling in about 500 retail stores. So, I’ve kind of been on both sides, so I really enjoy both aspects, engineering and being an entrepreneur. Several years ago, I decided to start a business where that was my focus is helping other entrepreneurs learn from what I learned from being an entrepreneur, but also obviously with the engineering.

So that’s kind of a quick summary. Predictable Designs. I offer various services, my main one, I’m not going to go into detail, but is a report where someone with a new concept for an electronic product and I basically review it from the engineering standpoint and give estimates on how much everything is going to cost. So that’s kind of the one of the main ways that I help people. Myself, my background I was doing electronics back when I was a kid. Bread boarding, this is obviously before there were development kits and such.

It was programming and doing electronics. I like to say back in grade school in the yearbook they had a section that says, “Can you imagine so and so.” And for me it was, “Can you imagine John teal not talking about computers.” So it’s kind of been my passion for my whole life. And then I went on, went engineering school to be an electrical engineer. Eventually, in my career, I moved to Dallas, became a design engineer for Texas Instruments while I worked on a master’s degree.

I designed microchips for them for about 10 years. Then I decided I didn’t want to be in an office anymore, so we moved to Alaska and I became just a full time consultant for TI for like five years and then eventually we moved to Hawaii also. And while we were in Hawaii, TI’d made the decision they were going to get rid of external consultants, so that’s when I started doing freelance work, which I did for a couple of years before starting Predictable Designs.

Michael:                 You’re in Arizona now, is that right?

John Teel:              Yeah. Northern Arizona.

Michael:                 Wow, that’s cool. It’s really interesting, all I need. So I show up at your website, I show up your doorstep and I’ve got a Frankenstein project in my hand and I say, “John, this is the coolest prototype. This is like this great idea.” What does somebody do when they’re at that point or maybe before they’re at that point? You know what I’m saying? Because I think everybody, when you start playing with Arduino or even just everybody, you kind of get these ideas and you think, “Hmm, I wonder what it would take to bring this to market?”

And you just got a lot of questions going through your mind, but a lot of us including myself might be completely naive to what that actually looks like, and I imagine there’s easier paths to get to to an end result. So I’m just curious, just maybe we could get some insight on what that looks like.

John Teel:              Yeah, absolutely. That’s really one of the things that I tend to focus on, is I like to help people, provide a dose of realism. I’m a very positive, optimistic person but so many makers or inventors or entrepreneurs, they go into it just kind of blindfolded and really having no idea of all the steps that lie ahead and how much money it’s going to cost. And you can’t normally take just an Arduino-based project to market. Arduinos, Raspberry Pis and all those are great for proving out the concept, but as soon as you want to start selling it, then an Arduino just is isn’t practical.

The technology behind it is, but it’s just the Arduino itself, you can’t really build a product with something like that inside of it. Mainly because of the size and then the cost. So I kind of like to start off with educating them about that there’s a difference between a proof of concept prototype in a manufacturable prototype. Something that you can make in high volume and sell at a profit.

So, part of that is the technology and the technical skills needed to develop a custom product, but also all the costs that go behind it, whether that be development cost for the electronics or the enclosure or prototyping or scaling it to manufacturing or ultimately how much it’s going to cost to manufacture. So, there’s a lot of areas in there where people tend to drastically underestimate all the steps.

if you have a prototype that’s based on an Arduino that proves your concept, that’s a great start and you’ve made some fantastic progress, but there’s still a long way to go. Even after you have a prototype that’s a custom manufacturable prototype, it’s still a long ways to go from a prototype to full manufacturing. Especially if you’re wanting to do this in Asia. China, for instance, there’s a lot of work that goes into, going from the prototype to for manufacturing.

I kind of like to, I’ll take a product idea, you’ve told me what the product is supposed to do, what technology you think it requires and then I basically will do like a feasibility study of that and offer suggestions on how to simplify it, how to save money. There’s so many steps and costs that people just don’t think of. For instance, with illogical products, it has to be certified, maybe that’s UL certification or at the very minimum FCC certification. So there’s lots of tricks you can do to lower those costs. Like with FCC, that the key to save some money there and simplify your life is to use a module for any wireless functionality.

So if you want to add Bluetooth, it’s much better if you can use a pre certified module, then that will save you probably about $10,000 just in FCC certification costs. So that’s sort of what I consider my key strength is helping entrepreneurs and makers understand everything that lies ahead and have reasonable expectations, because that’s really the only way you’re going to ever succeed, is you have to know the steps before you get to them.

Michael:                 Yeah. I know. I’m already feeling intimidated and I have nothing I planned to take to market right now.

John Teel:              It’s not easy. You have to be dedicated. I always encourage people, because it’s a lot of fun. It can be extremely exciting bringing a product to market. There are highs but there are also lows. It really is a roller coaster ride. You have to just be very motivated and you have to think long term. This is not something you’re going to do in a few months. This is going to be years it’s going to take you to make it ultimately a big success in the marketplace.

Michael:                 You’ve gotten comfortable with programming Arduino, you’ve made something kind of interesting like a proof of concept for whatever device you’re thinking of that solves somebody’s problem or so you think it solves somebody’s problem and you think somebody would be willing to pay for it. And so, you want to go from that to like, like you mentioned, a custom circuit board. So maybe you’re able to make that step … maybe you hire that step out and now you’ve got this custom circuit board.

There’s still a ton you have to do from then on is what you’re saying? If you’re actually going to get it manufactured in volume.

John Teel:              Yeah, absolutely. A lot of people find it surprising the piece … I simplify most products; electronic, tech products, down to two pieces. The electronics and the plastic. That maybe aluminum or something, metal, but basically the electronics and the enclosure. The electronics tends to be the most challenging part to develop. But it’s actually the enclosure that’s the most complicated and expensive piece to go from prototype to manufacturing. Once you have a custom board made that you’re able to order prototypes of, the process is pretty similar if you’re going to make a million of them.

There some extra steps but the basic design you the design files that you send to your prototype shop are the same files that you can send to a manufacturer to make millions of them. And that’s because ultimately, it’s the same technology used for electronics. Assuming you’re not making boards at home or that type of doing hand soldering. Anything, the more complicated board, the processes is the same. Whereas the enclosure, and I won’t go into too much depth on this part because obviously this is your podcast, this is about programming and electronics and not necessarily the enclosure.

But the enclosure is really expensive and complicated to take to manufacturing. Mainly because the technology used for prototyping, 3D printing is completely different than what used for production, which is high high pressure injection molding. So you have to have every part … Most products have at least two plastic pieces, a top and a bottom, and each of those require a metal mold for injection molding and those molds cost thousands of dollars. For really high volumes, it can can be into tens or hundreds of thousands of dollars for each mold. So those costs can be pretty expensive and there’s just that you typically have quite a few design changes you have to make, because what you can 3D print isn’t the same as what you can injection mold.

I find most products you’re looking at about a year after you get everything, you get a prototype that you think is production quality, you can kind of expect roughly about another year to really get manufacturing set up and be cranking them out. You can squeeze that down. It depends on what skills you have. If you’re able to do a big part or most of the stuff yourself, most of the time that’s going to be one of the fastest routes because no one is more excited or motivated than the inventor or the the person behind the idea.

My own story, when I was developing my own product, it had a big piece of it was 3D modeling and I hired mechanical engineers to do that. But I was so excited and just obsessed with making this product happen as soon as possible, that I was very impatient got tired of waiting, so I ended up teaching myself 3D modeling and then that that greatly expedited the whole process. As with many things, the more you learn the faster the process will be.

Michael:                 Absolutely. So are there ways, and I guess you’re sitting with this product idea and like you said, there’s significant money involved in getting something developed. Let’s assume that you’ve done some market research that you can tell maybe there’s some need. For example, and I guess I’ll`… Like one form of market research I think of is a Kickstarter, for example. So if you’re able to successfully fund a Kickstarter at a certain threshold, that could be an indicator that you’re actually filling a need in a market.

So, assuming that you’ve got that part down, is there a way to like get into it, so that you’re, I guess, slowly stepping into production as opposed to like, I don’t know, jumping head over heels into production. I don’t even know if that’s a fair question or if I’m kind of going with that.

John Teel:              Yeah, I know. I do. Because I get some people that they want to just go, they’re just ready to dive in, they’re ready to take out a home equity loan and fork over their life savings to make this happen. Typically hiring someone else to do the work. I rarely recommend that. I think that the best way … Ultimately, you’re never going to be able to do everything yourself. There’s just so many skills you have to do, you’re never going to be able to be the best at all of them.

I find that slow and safe route is to learn and do as you go along and don’t be thinking, “I’ve got to get this. Every day, every hour counts. I’ve got to get this out as soon as possible.” I think it’s a lower risk and it kind of lowers the cost at each step if you learn some of the skills to be able to do at least some of the steps yourself. Even if you just develop a proof of concept prototype based on an Arduino and work out some of the product issues, you’ve made some good headway that will end up saving you money in the future.

So I guess that’s kind of my general advice, is just take it slow but not too slow. It’s like you don’t want someone else to beat you to market and time to market is important. But you’ll learn so much along the on the path and you’ll find that in the end, by the time your product gets to market and is a big success, it will generally be a decent amount different than what you originally envisioned.

Through the whole process, you’re constantly gathering feedback and then implementing that feedback. So I think just learn as much as you can yourself and then outsource to freelancers etc. the parts that you can’t do or that you don’t feel like you would either want to wait for or you don’t feel like you have the technical ability to learn how to make a custom board, for instance.

Michael:                 Yeah. And I feel like even if you’re not taking the time to learn something, at least at a higher level, maybe not like the deep details, but at least at a higher level, maybe that will give you the language when you’re trying to spec it out to somebody to hire so that at least you’re kind of on the same page with at least language to be able to communicate the idea effectively, because otherwise, if you’re just clueless about it, and you’re like, “You know, this is what I want.” You know what I’m saying? I feel like that would really be helpful.

John Teel:              I could not agree more. That’s something I tell multiple people, because about half the people that I work with are makers and the other half are just strictly entrepreneurs that know nothing about electronics or hardware development. I always tell them you don’t need to be an expert, but if you’re going to be the founder of a hardware startup or an electronics company, you need to at least know some of the basics. You need to know what a resistor is. It’s things that may never know pop up too often, but I think if you’re going to bring a product to market you need to at least understand at a fundamental level how that product operates.

Michael:                 If you’re getting something developed, and I guess you’ve worked with a lot of people who are taking things to market, is there anything you see that people get caught up on that they don’t really need to be caught up on?

John Teel:              I would say, there’s multiple things but probably a patent is I think one of the main pitfalls that a lot of people fall into. A patent can be important and offer some benefit, but I see a good number of people that are just so focused on getting that patent. And they have to realize, I don’t know the exact number, but I’ve read it’s 99.99% of patents never make it to market. And along with that, and I just had written a blog article on this topic is, people tend to be very secretive with their idea. Especially if they don’t have a patent and they don’t want to tell anyone about it, they just want to hide away in their office and think about what they think the product should be.

And in general, that’s the absolutely worst mistake you can make, because no matter what you come up with, like I said, once you go through the whole process and eventually get it to market, you’ve got to be constantly implementing feedback and the end result is rarely what you started with. There’s a concept called the minimum viable product, which has kind of been in the software industry for a long time, but it definitely applies with hardware, and that’s to come up with the simplest version of your product that you can, get it on the market and then use that to gather feedback on other features that you think people may want and then add those features into the second revision of the product.

Kickstarter, like you mentioned, is a great way to gather feedback. It’s one of the best ways. The problem with gathering feedback is, unless money exchanges hands, the feedback is not all that useful. You can do surveys all day long asking would someone buy your product, but until they actually have to put their money down, what they say, people will tell you, “Oh yeah, I’ll buy it. I would buy it. I love it.” But if they saw it in the store, they would just walk past it and not put their money down.

So Kickstarter is great because it allows you to get that kind of feedback that people have to put their money down, but yet you don’t have to have a product ready to actually sell. So it gives you some early feedback that you can gather.

Michael:                 Let’s say that you’ve successfully got something manufactured, part of that process understanding through who your distributors for the product is? I’m assuming that’s something you need to be thinking about. Just like, where do you sell it? Who sells it for you? All that type of stuff.

John Teel:              Absolutely. And each distribution channel has different pricing structures. Generally, the easiest and the best way to start, is by selling it on your own website because you’re going to have the highest margins. You basically manufacture it and then you sell it directly to the consumer, so there’s not as many people taking a piece of the pie.

That just allows you, first of all, to sell the product at a more reasonable price because the problem when you first start, if you’re only making a few hundred units is, you’re not getting any economies of scale. So, you’re paying a lot more for your product than what you would, if you’re selling a million of them. For instance, if you tried to sell it to Wal-Mart, there’s going to be multiple people taking a piece of the pie and you’re not going to get to make nearly the profit.

Going through retail can be, through distributors, is a better option once you’ve got some volume going or you may be forced to sell your product initially break even or a loss. That’s fairly common and then you start to make a profit once the volume goes up. But selling it on your website is the highest profit, but there’s a lot of other great benefits, you get the most direct feedback.

If you’re selling your product through Wal-Mart for instance, you’re not going to really know what the end consumers think. You’ll know what the Wal-Mart manager of a buying decisions may think of the product or how it’s selling, but you don’t really get the direct feedback on how to make the product better that you would through your own website. So, I think selling it on your own website is the best way to start. Other options include going through Amazon, is a great way to sell a product.

The other benefit to selling it online is, you don’t need the retail packaging, which earlier, I’d said there’s two pieces to most products, the electronics and the enclosure. And I actually it’s three, and I forgot the list . The other one is the retail package,I  I would say isn’t as complicated to develop as the electronics, but it does take a considerable amount of time. And you’re looking at significant money to get a retail package developed because ultimately, that has to speak for the product versus online, the website or the listing on Amazon is what sells the product.

Michael:                 Yes, is kind of your ambassador for the product just sitting there on the shelf. How does it actually look?

John Teel:              Absolutely. It has to do everything, it has to tell the customer about the product, it has to catch their attention. And with my product, I spent a lot of time working on the packaging. Probably, I don’t know, a third of the development time was working on the packaging and tweaking it, because my first package, the retail package I put out and then I started getting feedback and certain things weren’t clear on the packaging. So, you have to go through various iterations to get that just right.

You can just take that out of the equation by selling it through your website. Problem is, with that, you can’t wait until you’ve got your product ready to sell and then think you’re going to set up a website and then people are going to start coming to it, as you know well. Getting people to come to your website is not trivial or easy. You need to be thinking ahead of time. I always suggest to people, create a website as soon as they have an idea for their product, and maybe, don’t give every single detail of the product away, but at least kind of have it out there and start trying to build up a community that you can hopefully sell the product to once it’s ready.

Michael:                 Absolutely. So, I feel like a lot of products… Well, obviously there’s a huge array of products, but I feel as though many products are now becoming not just the hardware, but they also have a very significant web application associated with them. I imagine that kind of complicates things when you’re I guess, I kind of think of one Arduino example, is like the One Shield. I’m not sure if you’ve heard of One Shield.

John Teel:              I’ve heard of it, but I’m not that familiar.

Michael:                 Well, it’s basically, it’s a shield. You pop it on your Arduino and you create a Bluetooth connection with your cell phone, and then you’re able to interact with the Arduino through your cell phone, essentially, turning on inputs and it can read … It’s a really neat little device, but the product is really the web app and the hardware is, I’m not saying it’s trivial, but it’s not necessarily like the buying proposition. I guess, is what I’m trying to say.

Do you see that more in some of the products coming out where, it’s like you’re going to have this hardware component but then you also have the software side. Does that affect how it ends up getting manufactured physically, the product itself?

John Teel:              Well, the main thing that it affects is the fact that especially investors, they love hardware startups that have a software component. Mainly because of the whole recurring revenue, they really like the subscription model. It’s a much easier way to build up a company faster than just selling a … Instead of just a one time payment and then you’ve got to go find a new customer each time, if you have some type of software subscription service that goes along with that, then you get a  lot of the benefits of a software company that allows you to ramp up your revenue much faster.

So, you’ll find  there’s an accelerator/investment firm called bolt.io that specializes in helping hardware startups. And they pretty much almost exclusively focus on startups with the hardware product that also has a software component. Just because mainly they know from a business standpoint that that adds a lot of benefits to the company. I think that’s probably the biggest impact on having a software component. I wouldn’t say it really changes the development too much, I’d say, there’s going to be some more software required. But as far as manufacturing, I would say that doesn’t really … I don’t see that that has a huge impact from that aspect.

Michael:                 So, this has been fun, I’ve learned a lot and I’ve really enjoyed this but, what is the first advice you could give to some scrappy person out there right now who is like, “Yeah, I really like, I’ve got this idea of, I’m working on this prototype.” People have been asking me about it because they see value in it. What do you think is a good first step for somebody like that.

John Teel:              Well, there are  two things. I think first of all is gathering as much feedback as you can. don’t try to develop it without getting feedback from others. And secondly is, know what the steps are ahead of you. So, before you just jump right in, start trying to better understand what all the steps are ahead of you and how much money you’re going to need. If you think you’re going to, “I’ve got $2,000 and I can bring this to market.”

You’re just going to be really disappointed and you’re going to just run out of money and not ever make it to market. I’ve had people contact me thinking they can bring a product to market for a few hundred dollars, actually. Any big tech company, they spend hundreds of thousands to millions of dollars or more to get a product on the market. Obviously, you can do it much cheaper than that, but I think you need to gather feedback and you need to know what the steps are. Otherwise, you’re just going to have bounce around and never really feel like you’ve made any progress.

Michael:                 And do you feel like we’d even be having this discussion 15 years ago. I still feel like for a person off the street, as I like to say, a punk off the street and that includes me. To be able to actually take something on your own to market ‘On your own’, I feel like that’s a lot more sensible than it used to be.

John Teel:              Oh, absolutely. It’s always been there, there’s always been inventors and things wanting to bring products to market. But the maker movement has, I think has been one of the best things to happen in that regard. It just opens you up to the world of development and allows you to see what all is involved in making a product. And yeah, I think it’s always been there but the interest level has definitely rised due to Arduino, and Raspberry Pi and 3D printing, that has really opened up a lot of people.

I’ve seen surveys before that show that pretty much about half of makers eventually think that they want to try to bring a project to market. So, I think it gets the juices flowing and a lot of people once they see their concept actually functioning.

Michael:                 That’s cool. Well, John, thanks a ton for your time, I really appreciate it.

John Teel:              Oh, no worries. It’s great talking with you, Michael.

Michael:                 Cool, thanks. Well, I hope you enjoyed that talk as much as I did. I learned a ton and John seems like a really nice guy. And man, does he know a lot of stuff, that’s pretty amazing. Pretty neat experiences he has. And I think what a wild ride it would be to be able to get something, some idea you have to market, pretty exciting.

Well, if you want to learn more about what John is up to, you can check out his company’s website at Predictabledesigns.com. And I’ll link in the show notes to the website, but also to one of the cool articles that they have there. It’s called From Arduino Prototype to Manufacturable Product. Really great read and actually, they’ve got a lot of really great articles on his website. So, it’s definitely worth checking out if you’re thinking about this kind of stuff.

Well, thanks a ton for joining me this week. I would love, if  you would take the time to leave us a review on iTunes, to rate our show and I hope you have a wonderful rest of your day or night or whatever it might be for you. Take it easy. Bye