3 ways to save money when creating a technical device

    Creating any new technology product is an expensive process. This is even more true for the device, especially the high-tech product. According to the Entrepreneur website, the average cost of developing a new device and its working prototype can reach $ 10 thousand.

    If the product is relatively complex, then the cost of developing it will result in twice as much. In most cases, the financial costs of developing and developing the product fall entirely on the shoulders of the entrepreneur, so finding ways to save money at this stage is a very important task that requires a creative approach.

    To begin with, it’s worth understanding that having a working prototype significantly increases the likelihood of obtaining external financing. Isn’t a “brilliant” idea enough, you ask? Unfortunately no. Most investors want to see with their own eyes evidence of serious intentions on the part of the entrepreneur, and there is nothing more serious than a real working prototype.

    Based on these assumptions, the importance of prototyping the device for all entrepreneurs, especially for those whose budgets are very limited, becomes apparent. Paradoxical as it may sound, a limited budget forces one to spend money on a prototype in order to use it as a proof of its concept and attract external financing.

    John Teel (John Teel) advises stick to three points to save money.

    Use existing electronic modules, especially if you plan to have wireless features

    There are a number of electronic modules made for integration with other products. Today, modules are available that perform a wide variety of functions, from Bluetooth to video encoding. Most technological devices, as before, require the development of circuit solutions, but if you can save money using the already developed hardware modules, then why not do it.

    If we consider wireless functionality, we should not lose sight of the fact that such devices require additional certification costs.

    In the states, a device that does not use wireless features is classified as an unintended radiator and its certification costs only about $ 1,000. A device using a wireless network is a deliberate emitter and is certified more expensive, about $ 10 thousand.

    When designing products using Bluetooth, you can join the Bluetooth Special Interest Group (SIG), paying an additional fee of $ 8 thousand. Membership in this organization provides additional opportunities, for example, the use of the secure Bluetooth protocol in new devices.

    It is also beneficial here at the initial stage to use the developed and debugged modules that have passed certification. Thus, the introduction of Bluetooth SIG is no longer necessary, reducing costs.

    Despite all the advantages of using modules, this way has its own drawbacks. Lower development costs lead to higher unit costs, so potential profits will be reduced. Although if you use ready-made modules only at the initial stages, and upon reaching significant volumes of production, switch to a full individual design, you can neutralize the disadvantages of both approaches.

    The second significant disadvantage may be the inappropriate sizes of the finished modules. The development of ultraportable devices does not allow the use of any ready-made modules, they can be too large, but I repeat that even the most seedy and awkward working prototype is much better than the coolest model on paper.

    Find an Engineer Partner

    A co-founder is generally a huge advantage for a startup, especially when the founders have a number of complementary skills. For example, a marketing specialist and a design engineer together will make an ideal team of startups, if you add a third person who understands finances to the third co-founder, you can get a dreamteam at the end.

    A cofounder with engineering skills, or at least the ability to acquire them, will seriously help save significant amounts on product development and development. If you estimate, then about 85% of the cost of developing a new product falls on engineering costs. Therefore, an engineer in a team can save a tidy sum in the long run.

    Another advantage of having a co-founder is that the asset represented by the team attracts investors more easily, especially if the skills of its members complement each other.

    Adam Callinan from Beachwood Ventures sums up in his article : “If something happens to the sole founder, then both the company and the investments made in it go down the drain. Therefore, with a sober calculation, significant investments in such companies are too risky and a normal investor will most likely simply refuse them. ”

    Hire several engineers at once

    It may seem a little strange, because the engineering staff is expensive, so why is it worth hiring a few engineers if you are trying to save money? The explanation is that the specialization of engineers dictates a different payment size, so the circuit designer will probably be more expensive than an engineer specializing in 3D graphics. In some cases, many engineering tasks are outsourced, which in turn increases costs. If instead you hire and control various engineering personnel, there is the possibility of reducing such costs, while getting the best result with better control and integration.

    In any case, there are no ready-made solutions for guaranteed cost savings, respectively, any measures of this kind require a scrupulous and meticulous calculation, which will show the feasibility of certain movements.

    UPD John Thiel's
    free book on the production and sale of technological devices (English).

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