Although it may seem like an irrelevant point, I'm guessing the price was a big contributor to the project death.
Why? because when you say up front (with no experience in hardware/manufacturing design) that you're going to sell it for $x the scramble then becomes "how can each party squeeze margin out?" When theres very little margin, parties are more willing to bluff knowing that they can walk away and there was almost no $ on the table.
Hardware has this problem, and I've seen it so many times, that the founder prices the hardware at only a bit (say ~30%) above the parts cost, not realizing the tons of NRE expenses, ballooning BOM, contractor costs, and the hundreds of other ways the price can easily double. Then they're stuck: the investors/contract manufacturer/designer/customer hates them. That leads to abandonment.
Please please please, if you decide to do any kind of hardware, add an extra 40% margin on top of whatever you pick. If you don't need it, you can always cut the price later! :)
Couldn't agree more. I've rarely seen an instance where you try to set price first on a piece of hardware (especially a ground breaking design) and then back the BOM into that price work out well.
You pretty much have to have deep expertise on the piece of hardware you are building for this work well, and on a "complex" device like this, I don't think it can ever be done properly.
You might even take after Apple and price it at double your materials cost. That might seem like a lot, but it forces you to make a compelling product that competes on features instead of chasing the bottom dollar. You can always lower the price if you're in a bind, but raising it is almost impossible.
If you're successful at selling that, you'll see healthy returns. I heard a recent blurb that Apple took 90% of the profits on laptops costing more than $1,000. They certainly didn't sell 90% of the laptops in that bracket.
What I'm saying is, dont double your materials cost, thats not nearly enough. You need to add margins TWICE - two 40% margins. Thats 3x material cost, 4x is even smarter. Skimping on margins kills, you can -always- lower the price later.
Why? because when you say up front (with no experience in hardware/manufacturing design) that you're going to sell it for $x the scramble then becomes "how can each party squeeze margin out?" When theres very little margin, parties are more willing to bluff knowing that they can walk away and there was almost no $ on the table.
Hardware has this problem, and I've seen it so many times, that the founder prices the hardware at only a bit (say ~30%) above the parts cost, not realizing the tons of NRE expenses, ballooning BOM, contractor costs, and the hundreds of other ways the price can easily double. Then they're stuck: the investors/contract manufacturer/designer/customer hates them. That leads to abandonment.
Please please please, if you decide to do any kind of hardware, add an extra 40% margin on top of whatever you pick. If you don't need it, you can always cut the price later! :)