Ultimately the problem with most crowdfunded hardware products can be summed up here:
>> Coolest wasn't able to manufacture the exact cooler in the promo videos.
>> "The Coolest Cooler in that video was a one-of a kind prototype," Grepper said. "Ultimately it's not a scalable design – it's an industrial design."
>> The proof-of-concept prototype cost him $15,000 to make, he said.
>> Grepper had no idea how much each cooler would cost to manufacture.
>> "At the early stages, you simply can't get that information," he said.
A model != a DFMA'd product.
There's tooling costs (I suspect the Coolest Cooler has several hundreds of thousands of dollars in tooling needs), there's supply chain, etc.
This takes time, testing, dozens of iterations, etc.
He sold a product he didn't understand the real cost of. Not maliciously but because he was naive and didn't understand the process.
Knowing what your true landed BOM costs are can take over a year of modeling, making production samples, negotiating with manufacturers and suppliers, etc. Even then you wont really know the cost until you enter volume manufacturing since there's scrap rate and QA issues you run into.
This VC firm does a great job breaking down a lot of the mistakes that this guy made and provides a set of frameworks startups can use to avoid this fate: https://medium.com/@BoltVC
Yep. It used to be prototypes looked like prototypes and so the 'polish' of a demo/concept gave you some idea of how mature the manufacturing/operations process was. Now it's so easy to fast prototype just about anything it's easy to bamboozle easily-fooled gadget enthusiasts by showing them something that makes them think the future is now, but in truth the "product" they're looking at is the modern equivalent of a bare PCB and a bundle of wires.
>> The proof-of-concept prototype cost him $15,000 to make, he said.
>> Grepper had no idea how much each cooler would cost to manufacture.
Maybe this should be part of the lesson learned for the CrowdSourcing community. The kickstarter project should be more transparent on how much it cost to make the prototype, and also show how much experience the kickstarter had (or access to the experienced) for creating such a product.
Mass manufacturing of a physical product is a totally different ball game to writing a code for a XaaS product.
>> Coolest wasn't able to manufacture the exact cooler in the promo videos.
>> "The Coolest Cooler in that video was a one-of a kind prototype," Grepper said. "Ultimately it's not a scalable design – it's an industrial design."
>> The proof-of-concept prototype cost him $15,000 to make, he said.
>> Grepper had no idea how much each cooler would cost to manufacture.
>> "At the early stages, you simply can't get that information," he said.
A model != a DFMA'd product.
There's tooling costs (I suspect the Coolest Cooler has several hundreds of thousands of dollars in tooling needs), there's supply chain, etc.
This takes time, testing, dozens of iterations, etc.
He sold a product he didn't understand the real cost of. Not maliciously but because he was naive and didn't understand the process.
Knowing what your true landed BOM costs are can take over a year of modeling, making production samples, negotiating with manufacturers and suppliers, etc. Even then you wont really know the cost until you enter volume manufacturing since there's scrap rate and QA issues you run into.