July 15, 2013 AT 7:36 am

Do Things that Don’t Scale #makerbusiness

Do Things that Don’t Scale by Paul Graham.

For hardware startups there’s a variant of doing things that don’t scale that we call “pulling a Meraki.” Although we didn’t fund Meraki, the founders were Robert Morris’s grad students, so we know their history. They got started by doing something that really doesn’t scale: assembling their routers themselves.

Hardware startups face an obstacle that software startups don’t. The minimum order for a factory production run is usually several hundred thousand dollars. Which can put you in a catch-22: without a product you can’t generate the growth you need to raise the money to manufacture your product. Back when hardware startups had to rely on investors for money, you had to be pretty convincing to overcome this. The arrival of crowdfunding (or more precisely, preorders) has helped a lot. But even so I’d advise startups to pull a Meraki initially if they can. That’s what Pebble did. The Pebbles assembled the first several hundred watches themselves. If they hadn’t gone through that phase, they probably wouldn’t have sold $10 million worth of watches when they did go on Kickstarter.

Like paying excessive attention to early customers, fabricating things yourself turns out to be valuable for hardware startups. You can tweak the design faster when you’re the factory, and you learn things you’d never have known otherwise. Eric Migicovsky of Pebble said one of things he learned was “how valuable it was to source good screws.” Who knew?


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