An interesting short article by Chris Quintero, about what goes wrong when hardware startups are ready to start selling actual production units. The company faces simultaneous “manufacturing hell” and “fundraising hell.”
My response: It’s a good analysis, but it’s symptomatic of the problem that the author does not include a single recommendation about manufacturing.
Manufacturing 1000 units is a whole different world than making 10, and I’ve seen many idealistic startups founder because the team thinks they can outsource all the manufacturing issues (and, to the least expensive contract manufacturer). Not understanding tolerances and not designing for manufacturability, for example, cause months of delay, that eat cash needlessly and often fatally. But some startup teams don’t have this expertise. If you are in that situation, work with an appropriate US-based partner such as Leardon.com. (No affiliation except that one founder is a former student of mine.)
Source: The Hardware Startup Valley of Death — Bolt Blog — Medium
You can guess that this author knows mainly about finance and marketing. Classic MBA profile! (I don’t know CQ and don’t know his background.)
It’s still hard for me to understand Tesla’s market cap, currently $35B ($35,000,000,000). Sales of 11K units/quarter are still smaller than tiny (for an auto company). Of course if it achieves a 50% annual growth trajectory for 5 years, that would justify a huge value – but I have not read anything saying that they are able to scale manucturing at that rate. (Admission: I used to consistently say that Apple was over-valued. And I was consistently wrong.)
“Tesla said in a filing Thursday that it delivered 11,507 vehicles during the April-through-June period, a 52 percent increase compared with the same quarter a year ago.”
I also did not realize that Musk was not a founder of the company. (1) Breakthrough Strategy and Innovation.
The Decline of Wikipedia: Even As More People Than Ever Rely on It, Fewer People Create It | MIT Technology Review.
Have any political scientists tried to model /improve governance of Wikipedia? LOTS of interesting questions there, and seemingly a way for an ambitious young academic to stake out new territory that will be increasingly important. Here’s the author’s view of the cause of problems:
The loose collective running the site today, estimated to be 90 percent male, operates a crushing bureaucracy with an often abrasive atmosphere that deters newcomers who might increase participation in Wikipedia and broaden its coverage.
a few more quotes:
The page explaining a policy called Neutral Point of View, one of “five pillars” fundamental to Wikipedia, is almost 5,000 words long. “That is the real barrier: policy creep,” he says. But whatever role that plays in Wikipedia’s travails, any effort to prune its bureaucracy is hard to imagine. It would have to be led by Wikipedians, and the most active volunteers have come to rely on bureaucratic incantations.
Yet it may be unable to get much closer to its lofty goal of compiling all human knowledge. Wikipedia’s community built a system and resource unique in the history of civilization. It proved a worthy, perhaps fatal, match for conventional ways of building encyclopedias. But that community also constructed barriers that deter the newcomers needed to finish the job. Perhaps it was too much to expect that a crowd of Internet strangers would truly democratize knowledge. Today’s Wikipedia, even with its middling quality and poor representation of the world’s diversity, could be the best encyclopedia we will get.
Interesting post by Andy McAfee about what he refers to as the Oracular approach to decision making. (Andy took over the Entrepreneurship course I taught while on sabbatical at MIT a few years ago. By all accounts he did an (even) better job than me!)
The above lists of characteristics are focused on a single fictional character in the advertising industry, but in my experience they’re fairly common across business oracles and their decisions in many real-world settings as well. When I reflect on how I’ve seen strategy, marketing, planning, and product design decisions made at large organizations, I see a lot of the stuff listed above.To be sure, I also see business oracles gathering lots of data, commissioning studies, and sometimes even running experiments. But I often get the sense that the point of all this activity is to confirm the soundness of the oracle’s initial idea, rather than to test it a state of affairs captured elegantly by this New Yorker cartoon. Several people at last week’s workshop on business experimentation observed that it takes months for many companies to set up even a simple experiment today, and opined that this is because of the great care taken to ensure the outcome.
via The Diminishment of Don Draper : Andrew McAfee’s Blog.
I’m not going to try to summarize his post here, but I would add that a good Oracle is called an expert. And expertise is real – and it’s necessary at the Craft end of the Craft-to-science spectrum.
Seph Skerrit was a student when I taught an entrepreneurship class at MIT a few years ago. (Thanks to Michael Cusumano and Ed Roberts for arranging the very interesting year as visiting prof.) He seems to have found a new idea in mass customization – congratulations! I don’t recall my reaction when he proposed the concept, but I might have guessed that “all the good ideas have been tried already” — a classic error. The students in that class were amazingly entrepreneurial – I now think that “serial entrepreneur” is a personality type.
Custom clothes are not my thing, but this would make a nice Father’s Day present. Seph’s team seems to have done a nice job on PR, too, with lots of press coverage in Style sections.
Today, Mr Skerritt is the founder of Proper Cloth, a New York-based e-commerce dress shirt company that allows shoppers to mix and match fabrics, using computer-generated tailoring for the right fit. Its early success largely derives from being one of a growing number of start-ups that use blogging and social networking websites in place of conventional, more costly marketing. Revenues since launch last year have grown at a rate of 40 per cent a month, and it is on track to be profitable by July, with earnings of about $30,000 a month.
Mr Skerritt emptied his personal savings, scraped together about $50,000 of leftover student loan money, and racked up his credit card debt before raising about $100,000 in seed money from friends and family. He says that the use of social media, as well as being a less expensive form of marketing, provides an easy way for customers to interact with the company and each other. “We want to hear what our customers have to say,” he says. “It’s useful to us and lets our customers feel connected to and engaged with Proper Cloth.”
via FT.com / Entrepreneurship – Custom-made for success.
Mass customization of clothing is at least 10 years old – even Levis does it. (The concept goes back to a book written in 1987, Future Perfect.) The NYT just wrote about it – the wrinkle is that it’s now called “customer design.”
Still, the article is nice because it shows how low the barriers to entry are. It also has a good description of how the company learns rapidly from customers, with real time chats and phone calls.
Since last Halloween, when the company’s dress shirt design application made its debut at http://www.blank-label.com, Mr. Bi and his three partners — ages 19, 22 and 30 — have joined a small but growing co-creation movement that uses the Internet to let consumers have a hand in making the products they buy. Web ventures have already popped up that allow shoppers to customize granola MeAndGoji.com, jewelry gemvara.com, chocolate CreateMyChocolate.com, handbags LaudiVidni.com and clothing for girls ages 6 to 12 FashionPlaytes.com. There are also online competitors selling design-your-own shirts, while Brooks Brothers is one major retailer that offers the service on its Web site.
via Prototype – Putting Customers in Charge of Designing Shirts – NYTimes.com.
For my upcoming product development class. A team, following the methods taught in the course, can improve the design of ANYTHING. A strong claim, admittedly.
Building a Better Mailbox
It is often said that there are no new ideas, but Ms. Troyer and Mr. Farentinos turned that cliché inside out. By correctly anticipating how the high-tech future would change the way we shop, they updated one of the most low-tech items around: the repository of snail mail, the trusty mailbox. Along the way, they responded to a growing concern — identity theft — that established mailbox suppliers had failed to address.
via Prototype – Architectural Mailboxes – A Tale of Determination – NYTimes.com.
The course is based on the textbook by Ulrich and Eppinger: http://www.ulrich-eppinger.net/