Twine, a gadget that promises to make your your washing machine tweet when the laundry is done and your basement send an email when it floods, raised more than $500,000 on Kickstarter in 2011 (Click Image To Enlarge)
When Twine's creators signed up for Kickstarter, they thought they'd make about 200 devices using the same $20 toaster oven they had purchased for the prototype. Then they raised more than $500,000.
Twine is exactly the type of sensor-stuffed, Wi-Fi-connected gadget you would expect to take off in Kickstarter's tech section. The device promises to make your washing machine tweet when the laundry is done and your basement send an email when it floods. Blogs called it “the future” within a week after debuting. Nobody was surprised when it raised more than half-a-million dollars--except for its creators.
Supermechanical expected to make about 200 Twines after running its Kickstarter project. Instead, it ended up shipping 4,000 of them to Kickstarter backers (Click Image To Enlarge)
When John Kestner and David Carr posted Twine on Kickstarter in November 2011, they had set their fundraising goal at $35,000. Their plan was to produce about 200 units using the same process that created the prototype. But six weeks later, having raised $556,541, they were now committed to shipping almost 4,000 units. The homemade wax mold used to create Twine's prototype was no longer going to cut it, and there wasn't another plan. Kestner tells Fast Company.
“We were definitely not thinking of the risk of being too successful.”
Twine's creators, John Kestner and David Carr, who call their startup 'Supermechanical,' prototyped Twine in the basement of a dorm (Click Image To Enlarge)
In scaling their manufacturing process, tasks the team of two hadn't considered--customizing a $15,000 set of tooling, designing packaging, communicating with backers, and searching for components--added up to an unmanageable number of full-time jobs. Twine’s estimated delivery date of March quickly became unrealistic.
Despite the disproportionate attention that superstar Kickstarter projects like Twine get, they're rare. Most projects raise less than $10,000, and until last year, none had raised more than $1 million. But as Kickstarter's scale rockets, breakaway projects like Twine are becoming not only more visible but more common. Seventeen Kickstarter projects passed the $1 million (or euro equivalent) milestone last year. Six of them, like Twine, were gadget projects, which are arguably left in the most awkward position after breakout success. When a Kickstarter project involving hardware takes off, what started as a dream and a prototype can morph into a mass-manufacturing commitment within a couple of weeks. It’s something of a Cinderella story--but one in which Cinderella must learn how to navigate mass manufacturing overnight. Here is how it worked out for Twine.
Twine's prototype cost just a few hundred dollars to create. Its first version's outer casing baked in a $20 toaster oven (Click Image To Enlarge)
Stage 1: Prototyping
Prototyping Twine cost a few hundred dollars. Recently graduated from MIT’s Media Lab, Kestner and Carr “squirreled away” a space to work in the basement of a Harvard dorm. Carr already owned a soldering iron and the electronics equipment for Twine’s circuit board, and he carved a wax mold for Twine's blue outer casing using a milling machine that he had built himself. Silicone and urethane cost about $100 at a local supply shop, and the toaster oven where Twine's first casing baked for six hours cost another $20.
Carr made the wax mold for Twine's outer casing with a homemade milling machine (Click Image To Enlarge)
It wasn't until the third day of the Kickstarter project, when Twine's funding passed three times the original goal, that the pair of inventors realized Twine had scaled past this manufacturing process. Kestner says.
“If we had done 4,000, it would have taken months just to physically manufacture them. That’s not including all of the development time.”
Carr already owned the soldering iron and electronics equipment he needed to create Twine's prototype circuit board (Click Image To Enlarge)
3-D printing, Github-type sites for creating hardware such as Upverter, and makerspaces like Boston-based Artisan Aylum have all made the path to creating a functional prototype or a small batch of gadgets easier. Scott Miller, the CEO of a production consultancy called Dragon Innovation that has about 20 Kickstarter projects as clients says.
“But the big gotchya is that is really just the beginning, and there’s a tremendous amount of work to do after that. Because the entrepreneurs have a lot of unknown unknowns, they don’t really know how far along the timeline they are. And typically they will think they’re a lot closer to getting volume on the shelf or e-commerce than they actually are.”
The tooling for Twine's outer casing wasn't as easy to 3-D prototype, and the resulting component wasn't usable the first time around. Had the Supermechanical not gotten a refund for a mistake with the factory's software, it could have cost them $15,000 (Click Image To Enlarge)
Stage 2: Surprise Scaling
Though Kestner had studied industrial design as an undergraduate, he had never actually produced a physical object on a large scale. “To be honest, I Googled a lot,” he says.
All of Twine’s manufacturing partners and most of its component sources are located in the United States, which successfully avoided the problems with language, time, and cultural barriers that Kickstarter projects such as Pebble and LIFX have dealt with while manufacturing their products in China. Even without overseas manufacturing, however, there were plenty of unanticipated challenges.
The company that manufactured Twine’s outer casing, for instance, didn’t design the tooling it used to shape them. Kestner did. Whether or not his designs ended up being functional, they each would cost $15,000. Twine’s gut, the part that holds its circuit board, is made of hard plastic and was easy to test with a 3-D printer before putting money down for the real deal. But only one 3-D printer would prototype the tooling for Twine’s rubber casing, and the results weren’t nearly as accurate as the gut prototypes. When the actual metal tooling arrived, it was a disaster. The case was too tight, and it looked terrible. Problems with the manufacturer’s preview software got the team a refund, but the lost cost could have killed the project. Even with the refund, it cost time. All together, it took five months to just design Twine’s outer casing.
Twine’s gut, the part that holds its circuit board, is made of hard plastic and was easy to test with a 3-D printer before putting money down for the real deal (Click Image To Enlarge)
Meanwhile, Twine’s first employee coordinated the delivery of 100 components to the factory that assembled Twine’s circuit boards--a job that was part scavenger hunt and part logistical Olympics. Kestner worked on a design for Twine’s packaging and put together a website for managing Twine backers’ new addresses and international shipping costs.
By the time the casing and circuit boards began arriving in June, the team had moved to Austin. Boxes started piling up in their new workspace (Click Image To Enlarge)
By the time the casing and circuit boards began arriving in June, the team had moved to Austin. Boxes started piling up in their new workspace.
By the time Twine's parts were ready for assembly, the team had moved from Boston to a workspace in Austin, TX (Click Image To Enlarge)
The casing arrived from an injection molding plant in Minnesota. Circuit boards came from a manufacturer in New Hampshire. And the 8-piece boxes that Kestner designed himself came from North Carolina in large flats.Supermechanical, the company behind Twine, had already spent nearly all of its Kickstarter money. It had overshot its estimated shipping date by three months, and it hadn’t even started putting devices together.
A factory in New Hampshire assembled Twine's circuit boards. Its cases were made in Minnesota, and its packaging manufactured in North Carolina (Click Image To Enlarge)
Stage 3: Missing The Deadline
It isn't just first-time hardware entrepreneurs that struggle with the manufacturing demands of surprise scaling via Kickstarter. Pebble Technology's CEO, Eric Migicovsky, has been working on smartwatches for four years. The company manufactured about 1,500 units of its first product, InPulse, at a Bay Area manufacturer. But the 85,000 Pebble smartwatches the company owes Kickstarter backers after raising $10 million on the site required a shift to an overseas manufacturing process, and--though Migicovsky says this plan B existed in advance--the company missed its September estimated delivery date.
In fact, most breakaway hardware projects have missed their deadlines. iPhone station Elevation Dock shipped about six months late. Virtual reality headset Oculus Rift initially set its expected delivery date for October, but announced recently that it now expects to be delivering developer kits by March 2013. By one estimate, only 25% of Kickstarter’s design and technology products deliver on time.
Twine technician tests each finished Twine for quality control issues. This is a very time-consuming procedure, but a necessary evil in order to avoid returns for defects, requests for refunds and the resulting bad publicity (Click Image To Enlarge)
Being late is not necessarily a big deal. Kickstarter is, after all, designed to support unfinished projects. A bigger problem is reaching a Kickstarter funding goal only to realize that the funding can’t come close to covering your costs. Twine, for instance, set its goal at $35,000—aiming as low as possible in order to avoid missing it.
Kestner says.
“If we had gotten less than we did, but still met our goal, that would have really hurt us; we would have lost money. There’s an uncomfortable valley between hand-making stuff and being able to have the capital to invest in tooling and all the stuff that goes into mass manufacturing that you just can’t get good prices on without mass production. So what do you do? You can’t afford to hand-make 1,000 of something.”
Dragon Innovation’s Miller says he often gets panicked calls from Kickstarter project creators who can't feasibly complete their projects. Their creators did not understand the manufacturing costs when they set their goal. Their timeline is unreasonable, or their design isn’t actually manufacturable.
Miller says.
“They’ve also spent the money, and Amazon and Kickstarter have taken their cut. They can’t even give back the money. It’s kind of a really unfortunate position to be in.”
Stage 4: Delivering Against The Odds
Kestner asks at some point while describing Twine's journey from Kickstarter funding to shipping,
"What’s that quote that says, 'If I knew how hard it was to do it, maybe I wouldn’t have started in the first place?'"
Kickstarter doesn't provide any warnings. While it approves projects before they go live on the site, the process is more like filling out a college application than an investigation into the project’s feasibility. In September, however, the platform took its biggest step in preventing hardware projects from drowning in their own success (and the phrase "Kickstarter vaporware" from entering the vernacular) by banning renderings and simulations. it advised in a blog post.
“The best rule of thumb: under-promise and over-deliver.”
Earlier that summer additional guidelines for design and technology products required information about creators' relevant experience and a manufacturing plan. Kickstarter has also advised against posting finished products on the site, remind its users that "Kickstarter is Not a Store." So what is the appropriate amount of risk?
No matter how overwhelmed by their projects, all six of the Kickstarter gadget creators I interviewed for this article talked about the opportunities Kickstarter gives entrepreneurs to solicit input and test demand for a product at an early stage. Kestner says.
"It’s okay that you have the chance to fail. That’s how good stuff gets made. You’ve got to have the chance to fail."
Some did say they wished they had waited until later in the development process before putting their gadgets on Kickstarter. Some couldn't have afforded to get further along in the process before their Kickstarter campaign. Alex Hawkinson, the CEO of the company that makes SmartThings, a platform for connecting objects to the Internet that raised $1.2 million, said his product was already on track to ship when the campaign first went live. He set the reward thresholds knowing that he'd pretty much break even. He told Fast Company.
“We were on track to launch the product at the end of this year anyway, but we were all Kickstarter users, and thought it was a great way to get the word out and sort of build on that three-legged stool.”
Even without being prepared for it, Twine’s creators successfully navigated the mass manufacturing process by picking up new skills as they went. Now with a staff of five, Supermechanical started snapping units together last summer. Each of the 4,000 units took about 10 minutes to assemble, test, and package: A total of about more than 650 hours.
Supermechanical finally shipped its first 25 Twines in September--about six months after the estimated delivery date.
Kestner and Carr celebrated with a nice dinner. Kestner says.
"We didn’t cry. But it was a great, great weight off."
The next day, they dove into what is sure to be a never-ending series of unexpected challenges: The circuit board assembler couldn’t keep the schedule it had agreed to, some of the shipped Twines returned in the mail, and, with the Kickstarter project behind them, it was time to address the small task of turning Twine into a sustainable business.
Kestner says.
“I’m a workaholic. I’ve always been a workaholic, but this is the hardest I’ve ever worked in my life. It’s not free money. That’s for sure.”
COMMENTARY: The thing I see happening with a lot of entrepreneurs building something is their lack of knowledge and understanding of the intricacies of manufacturing. Developing production-ready prototypes, preparing precise engineering drawings and bills of materials, and exacting tooling is extremely important. Several of my former clients didn't both to provide manufacturer's with precise engineering drawings or a bill of materials, or take into account the useful life of the tooling, or factor in additional tooling as production qualities scale.
My recommendation for startups is to avoid assembling the finished product yourself, not unless you care about your family and kids, don't have much of a social life, and you have a high tolerance for pain and frustration. Do what the big boys do. Work only with individuals experienced with the manufacturing process from start-to-finish. They are familiar with the material specifications, and whether the finished product will holdup during regular use.
If you can afford to produce several working prototypes, do so, then conduct a thorough A/B market test in order to determine if the product satisfies customer needs, provides a great overall experience, and provide you with the feedback to make any last minute changes to the prototype before you go into production on the final finished product. Again, I can't tell you how many times entrepreneurs dive right into manufacturing without conducting an adequate market test, only to encounter quality control issues and huge numbers of product returns.
Courtesy of an article dated February 5, 2013 appearing in Fast Company
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