Ben Einstein Funds Hardware Startups — Here’s His Advice for You

DC Denison

DC Denison is the co-editor of The Maker Pro Newsletter, which covers the intersection of makers and business. That means hardware startups, new products, and market trends.

DC manages customer stories at Acquia, the digital experience company.

93 Articles

By DC Denison

DC Denison is the co-editor of The Maker Pro Newsletter, which covers the intersection of makers and business. That means hardware startups, new products, and market trends.

DC manages customer stories at Acquia, the digital experience company.

93 Articles

Article Featured Image

Ben Einstein is an experienced product designer and investor. He is currently the managing director of Bolt, an early stage seed fund focused exclusively on hardware startups. In addition to seed capital, Bolt invests full-time staff, shop equipment, and extensive expertise in manufacturing and commercialization. Prior to starting Bolt, Einstein ran Brainstream Design, a product design and development consultancy in Massachusetts. He has been directly responsible for bringing to market a long list of products (the products’ identities are under nondisclosure agreements), covering diverse sectors including consumer electronics, high-performance audio, sporting goods, and green energy.

Ben-2

Photography courtesy of Bolt

ADVICE

Speed can kill
Sometimes it’s good to go fast, sometimes it’s not. You have to be strategic, you have to figure out how you’ll tweak the product in the early stages. So be cautious about coming out too fast.

Don’t hire a design firm
This one gets me in trouble, but when you hire a design firm you are outsourcing the most fundamentally valuable work you do as a company: building a product that people love.

BEWARE…

The long shadow
Decisions that you don’t think are decisions at the time — This Bluetooth radio or that one? — cast a shadow that lasts for months or years. If you pick the wrong microcontroller, or one with not enough RAM, it can haunt you forever.

Cowboy engineering
Hardcore engineers use this term to describe flying by the seat of your pants. Some people do it well, but if you want to build a product for the masses that works reliably, you have to be rigorous about testing the product while you’re in development.

Crowdfunding
Kickstarter is very appealing but extremely dangerous if you don’t use it correctly. You are amplifying all the decisions you made — in a cowboy style with long shadows everywhere. You’re broadcasting to the world and you haven’t figured out what your retail price is going to be, what your bottom-line costs are, how and where will you manufacture, and so on. Go through product development and early manufacturing first, and then use Kickstarter to launch. That works much better.

IMPORTANT NUMBERS

Venture capital
Ask yourself if this is even what you want. A typical VC investor is looking for a company that will be making $100 million in revenue within five years of initial investment. That’s a lot. Most companies don’t get there. A VC invests in 20 companies; maybe two will be successful, but the success is so big it will pay for all the failures.

Prototypes
Make one prototype a week. People forget to build stuff. They get caught up in the idea of perfection; they want something to be perfect, moldable, beautiful, before anyone uses it. But you don’t need to build a fully functional product before you can start getting feedback.

How much feedback?
Talk to about 30 people, not including your mom. Five people isn’t enough, more than 50 takes a lot of time.

First run, minimum order
If you want to build any product in China that’s fully assembled, it’s hard to do that with fewer than 5,000 units. The factories don’t make money on the setup; they make it on the volume.

Validation
Three stages are critical in the validation phase of building, and they’re not fun: engineering validation test (EVT); design validation test (DVT); and production validation test (PVT). These things are complicated, but if you don’t take the time for testing, you fail.

A SHOUT-OUT TO DAD

I’ve always been a tinkerer, a basement kind of guy. That comes from my dad, who was really cheap. Whenever something would break — say, the washing machine — he’d think, I could have the Sears guy fix it, or my son. I learned like that, and I started seeing the whole world that way.

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