Turning a great idea into a working, living, breathing (batteries required) prototype is difficult. With few resources available online and ample opportunity for wrong turns, steering your way from blueprint into a working prototype can be a roller coaster ride. Adding to the difficulty, crowdfunders often fall into the trap of promising to deliver an overly complicated product, in too short a timeframe, without having raised enough capital to do so. That being said, with proper guidance, this challenging stage of the crowdfunding and product lifecycle can be tackled successfully.
In this article we will breakdown 3 key steps and actionable ways to get your product crowdfunding and manufacturing ready.
To get to the bottom of the manufacturing puzzle, we turned to our friends and experts, Dragon Innovation. Combined, their team has over 300 years of manufacturing experience; they truly know it all when it comes to prototyping and launching a successful crowdfund.
Taking a page (or three) from their book and speaking with Scott Miller, CEO of Dragon and partner of hardware investor, Bolt, we’ve carved out 3 steps to follow in order to bring your idea to life.
3 Steps to Getting Your Product Crowdfunding-Ready
1. Build a Working Prototype
i) Sketch it
This is the easy part. Get something, anything down on paper. Your rendering doesn’t have to represent all the nuts and bolts of your gadget, but should illustrate what it is you’re building. There will be many iterations from here on out, and in all likelihood, your final product will look very different from this initial blueprint. Put thought to paper!
ii) Build a DIY Prototype
This is when it’s time to get a little creative and actually build something. It doesn’t need to be polished or even work. You’re simply trying to get your idea off the paper, and into the third dimension. Hot glue guns, pipe cleaners and duct tape permitted!
iii) Create 3D Printed Prototypes
This is when things start to get real. For hardware innovators, 3D printing has become a true game changer. Never before has it been possible to build relatively complex gadgets from concept to working prototype in the same day. This drastically shrinks turnaround time, and allows you to build dozens of prototypes in a formerly impossible timeframe. The benefits to 3D printing are enormous, including: saving money, mitigating risk, generating real feedback, and testing different ideas and components quickly.
Think of the 3D printing as the experimental phase in building your working prototype and the test phase for eventually designing and manufacturing a product that will ship to real-life backers. As Scott Miller explains,
“Initially, in the early-stage where you’re just doing some sketching and 3D printing, it’s really easy to change things without repercussion. In the later stages where you’ve bought—it could be tens of thousands of dollars in inventory and tooling—then, you have a lot more invested in the game.”
In other words, 3D printing lets you get to know your gadget by revealing: what works, what needs improving, what may not translate for consumers, what components could be difficult to manufacture and so forth.
Iterating on your hardware design before you have too many chips in the game, will allow you to iron out what Scott Miller considers to be the two key components of a prototype: the “works like /looks like”. “Works like” proves that the prototype functions as it’s supposed to. “Looks like” means that aesthetically, the design embodies all necessary elements, and is both compelling and easy on the eyes. Although not always necessary before crowdfunding, developing a complete “works like/looks like” prototype is what Miller calls the “holy grail”, or what we’d like to call, a double whammy!
In the prototyping phase before you crowdfund, you’ll need to reach two other major milestones before you’re ready to launch. However, when it comes to building the physical prototype, Miller explains that a “3D printed product that works as it should—if only for a minute instead of 100 hours”, is usually an indicator you’re far enough along. In saying this, Miller adds, an innovator that’s ahead of the game will have thought about design and manufacture for assembly, and will be confident that “there aren’t any volume problems or technical risk”.
Pro Tips for 3D Printing Prototypes
- As a rule of thumb: if a feature is too small to print, it’s too small to mold.
- Built 5 prototypes? Build 10. Then build 5 more.
- Keep 3D printing iterations until you’ve got something design-ready or nearly ready to hand over to a factory.
- Don’t start tooling until you’re confident your product is near the “works like/looks like” stage. At this point, you may need to tool for plastic drop testing or to produce greater volume—we get it!
iv) Industrial Design + Manufacture and Assembly Stages
For hardware innovators who have a working prototype, the next step is to get it ready for mass production. This is where true capital is required, and when an entrepreneur's confidence must outweigh the potential risk. Before going into full-blown manufacturing and assembly, innovators often hit the crowds to prove market fit, receive greater validation, and understand what changes users want to their product before it’s too late. Crowdfunding before manufacturing not only minimizes the risk, but if done correctly, covers the enormous production costs and beyond.
Here are some excellent resources to learn more about the manufacturing process:
a) Design for Manufacturing Course (13 part series)
b) How to Select a Factory (2 part series)
c) 101: From a Working Prototype to Your First Batch
d) Where to Buy Prototyping Materials: AdaFruit and SparkFun
2. Develop CAD Files
CAD stands for Computer-Aided Design, and is used to help with the design and creation process of building a product. In simple language, CAD are the mechanical files that illustrate how your product will work. The output of CAD files are used for machining and other parts of the manufacturing process. Developing these precise files allow designers to create, modify, pull apart, and join product components with ease. The renderings can be both 2D and 3D, are act like sophisticated digital and printable blueprints that detail how the product will be built, ensure parts are compatible with manufacturing processes, and show which parts should be injected moulded, dye casted, stamped and so forth.
Popular CAD programs are:
For more information, read these 6 Guidelines for CAD Modeling.
3. Create a Bill of Materials (BOM)
The next step in the prototyping stage before you’re ready to crowdfund is developing a Bill of Materials (BOM). To put it simply, the Bill of Materials is the shopping list for all of the required ingredients in your hardware innovation. The BOM is not only a crucial hand-off document for contract manufacturers, but is required for crowdfunders to properly gauge their funding goal.
The BOM is basically a detailed itemized list (often an excel sheet) that outlines part names, part numbers, part description, phase when part is introduced to building life cycle, procurement type, quantity required, and so forth. Depending on the complexity of your hardware, there may even be subassemblies broken down for specific parts within the gadget.
Here’s an example of the overarching buckets of costs that will be broken down and detailed in your BOM:
- Tooling (what’s used to create injection molds)
- Injection Molds (e.g. plastic and metal parts)
- Purchase Parts (e.g. motors and wires)
- Electronics (e.g. processors and radios)
- Labour (worker costs)
- Scrap (wasted materials that will not come off the line)
- Mark-up (e.g. factory overhead and factory fees)
- Extra Manufacturing Costs (e.g. flying team back and forth to Shenzhen)
- Packaging (e.g. gift box and shipping materials)
A sample BOM:
Additional costs that you will need to consider before setting your funding goal: non-recurring engineering costs from building up your final prototype, web development, engineering marketing and any other notable bills. By carefully estimating your total costs, tacking on the always smart “it’ll cost more than you think” 5-10%, and adding on your retail mark-up (at least 50% of total BOM/manufacturing costs) you can set a proper crowdfunding goal.
Another important cost to take into account when determining your funding goal is the crowdfund itself. Platforms like Kickstarter charge 5% of total funding raised, plus additional payment processing fees of 3-5% (totalling 8-10% of dollars raised). Crowdfunding independently with Celery would cap total fees under 5% (2% Celery platform fee + Stripe processing fee of 2.9% +.30 per transaction).
Once all three steps have been done—and done well—you’ll officially be in a good place with your prototype. When it comes to your prototype, it’s not just about building a product model. As Scott Miller explains, innovators set for crowdfunding should,
"get their working prototype to about an 80% complete point. The way we define that is having the BOM, CAD and working prototype.”
For Miller, who’s seen it all before, a product that is at the 80% mark is sitting pretty for a successful crowdfund. Success is not only defined by raising enough capital to cover manufacturing costs, but delivering the product as promised, within the timeframe your backers signed-on for.