With Andra Keay, Managing Director of Silicon Valley Robotics
Andra Keay is the Managing Director of Silicon Valley Robotics which supports the innovation and commercialization of robotics technologies. She has headed up Venture Capital rounds, is a fellow lecturer, TedX speaker, and an XPrize judge. Her office is also just down the hall from our Mako Design California office at CircuitLaunch. Today Andra is going to share some valuable knowledge to help inventors, startups, and small manufacturers understand how robotics is becoming a mainstream part of new electronic mechanical products, the future of the consumer robotics industry, and tips for anyone thinking about a robotic product or even incorporating basic robotics into their new hardware product.
Today you will hear us talk about:
- Robotics industry today
- Robotics 2.0
- A lot of hardware development is included in this topic
- Commercialization of robotics
- Robotics founders are slow to commercialize because they spend too much time researching, but then slow to execute
- Three stools of robotics hardware companies going to market
- Funding, product-market fit, manufacturing
- People underestimate the value of spreading hardware to the world
- Hardware is long-lasting, takes a while, but has profound value when done well
The Product Startup Podcast
112: Designing & Commercializing Robotics Inventions
With Andra Keay, Managing Director of Silicon Valley Robotics
00:00 | Kevin Mako (KM): Hello product innovators. Today, we learn from robotics community leader on what modern robotics innovation startups are doing to succeed in the consumer product segment.
00:12 | Voice-over: You’re listening to the Product Startup podcast. The show that helps bring your product idea to life, by chatting with successful inventors, product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store shelves. We’re taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America’s leading experts on hardware development for small product businesses. Now, on to the show.
00:47 | KM: Welcome back everyone. Today I’m very excited to introduce Andra Keay to the show. Andra is the managing director of Silicon Valley Robotics, which supports the innovation and commercialization of robotics technologies. She is headed a Venture Capital rounds as a fellow lecture and an XPrize Judge. Her office is also just down the hall from our Mako Design California office at Circuit Launch.
01:08 | KM: Today, Andra’s going to share some valuable knowledge on how inventors, startups and small manufacturers can understand how robotics is becoming a mainstream part of new electronic mechanical products. Also the future of the consumer robotics industry and tips for anyone thinking about robotic products or even incorporating basic robotics into their new hardware product. Now on to the episode. Hi, Andrea, welcome to the show.
01:36 | Andra Keay (AK): Thanks Kevin. It’s great to be here.
01:38 | KM: I’m excited to have you on. And of course your office is right across the hall from our office at Circuit Launch at our San Francisco facilities. Amazing facility. And you’ve been there for a while now. What can you say about that place because I’m a huge fan of Circuit Launch?
01:52 | AK: I love it. I’m distracted by the robots that go past my window quite frequently, but it has been great to be there. It’s perhaps one of the second tenants there to see that the space is completely full now. And that’s in spite of the pandemic. It’s such a range of interesting startups there. What can I say? I really love being there. And I see the benefits for the startups that are there as well because they operate as a community, where one person’s answer can solve another person’s problem.
02:26 | AK: And we also see people cycling through the community as well in one company, then moving to another role at another company, which I think is wonderful because one of the hardest things to do as an early stage company is to hire and to have expert answers for some of your important questions. it’s a community of knowledge. And that is one of the most useful things that startups can have.
02:53 | KM: I love that you mentioned the community element. We had Alex Dante the a CEO of Circuit launch on the show actually a few episodes ago. And that was one of the biggest things that we were talking about, is how incredible it is. Mako design is kind of the design firm of record there. It’s great to see all the startups. So obviously we have clients in the space and see how they emerge and grow, but it’s such a powerful community of all the different types of connections that you may need, either in one degree or two degrees of separation definitely in three degrees, you’re getting huge access, especially in the hardware space because hardware obviously, in the whole bay area software always and really still does prevail is kind of taking the limelight.
03:31 | KM: And that’s what’s so amazing about a facility that’s focused so exclusively on hardware and hardware companies and helping them grow and scale to be big things, that eventually graduate out of the space and get their own or evolve from there. So it’s really amazing to see the growth of that facility and see how popular it’s been, even despite COVID, as you mentioned, going along. So just give us a bit of a background on yourself. You’re AN incredibly well connected person in the industry. Give us the Kohl’s notes. How did you get here to where you are today?
04:00 | AK: I came over from Australia in 2010. I was finishing up my masters in human robot interaction or human robot culture. What fascinated me most was the commercialization of robotics. And so I wanted to come to Silicon Valley, which is ground zero for robotics. Now, most people don’t realize that because Silicon Valley is the internet giant. And indeed in Silicon Valley, robotics is a small fish in a very big pond. And is frequently overlooked in the same way that you said hardware is overlooked because real estate and talent are expensive in the valley because of the top tier companies that are software based.
04:47 | AK: And yet we have twice to three times the amount of robotics innovation as Boston and Pittsburgh put together. We’re the leading center in the world for robotics innovation, although China has tried very hard to catch up and they’re creating a lot of robotics businesses. The innovation factor is still perhaps strongest in the United States. There’s certainly also some great robotics coming out of other countries.
05:17 | AK: And the grant funding in Europe is good, but on the heels of the defense industries, there has been a lot of R&D funding that has gone into robotics over the last 20 years. And that has come to fruit. This is what I saw when I came over in 2010 and I stepped into an association that was forming to meet that need, Silicon Valley robotics. And this is a coalition of robotics companies in the Bay area. Pioneers like SRI International, Willow Garage, while it still exist, wash and adept technologies, which was America’s only traditional robotics manufacturer.
06:02 | AK: And they were trying to pioneer autonomous mobile robots at the time. They were perhaps just a little bit early as a publicly traded company; they were affected by the stock market crash. And what we see is that the autonomous mobile robotics companies that they were working on then are now very successful. And they’ve all been acquired by other companies, of course, global companies.
06:27 | AK: But we saw the start of the wave of commercialization of what I call a new form of robotics. I call it robotics 2.0 because it is just as different as the different iterations of the web or internet technologies. The original robotics industry, 50% of it is employed in automotive welding. Now that is highly susceptible to the ups and downs of a single industry, the automobile industry or automobile manufacturing.
07:02 | AK: And the other 50% is split across a range of things, from agriculture to primarily dangerous materials handling, mining, paint work, chemicals, that kind of thing. And these are the stupid robots. These are the robots that are expensive and that needs safety cages around them by enlarge, that’s robotics 1.0.
07:25 | AK: In 2004 and 2005 DARPA ran a grand challenge for self-driving cars. And the first challenge nobody crossed the finish line. The second challenge, almost all the teams crossed the finish line. And that was only one year later. The third challenge, they moved from the desert to a simulated suburban environment, although it was at an air force base. And there were three different tiers of companies competing in that or teams competing in that.
07:58 | AK: And Google was in the background, buying them up as were some of the other vehicle manufacturers after that. So we saw the rise in interest in robotics then. And then in 2012, Amazon acquired Kiva systems. And that was one of those early mobile robots and more connected. That made everybody sit up and go look, if Google’s investing in robots, if Amazon’s investing in robots, this technology might be becoming interesting.
08:33 | AK: Now those companies could afford to take a kind of long bet on it. But Amazon hasn’t slowed down their interest in robotics. Even if individual robotics companies have been slow to bear promise. And if there’s one thing that I can say to make sense of this, because the internet is flooded with things like Boston dynamics videos, and people go well, that’s not a very useful robot, is it? And it’s not supposed to be. Boston dynamics strength is their research on the leading edge of robotics.
09:15 | AK: And when you acquire the Boston dynamics team, you really shouldn’t be thinking about a product that looks like something they’re making. You should be thinking about how useful are the developments that they’ve pioneered in making something that’s smaller, more robust, more affordable, and useful to the consumer. They’re a leading edge firm. They’re not a product company.
09:40 | AK: And yet the most popular videos show robots that are really not useful and not likely to commercialize. In a sense, you know when a robot is done right, then you don’t even think about it anymore. It just becomes an apply or a tool or something that’s getting a job done. And this is a joke amongst roboticists. How do you know what a robot is? It’s something that doesn’t work in a demo and that kind of captures it.
10:10 | AK: Robotics is quite a moving field. If you looked at the current definition today of what a robot is and applied it to the robotics industry for the last 50 years, they’re too stupid to count as robots, and nonetheless, that is the robotics industry. And that’s why I say it’s robotics 1.0, which is a major industry, it’s maybe worth $42 billion a year in sales.
10:38 | AK: And then there’s robotics 2.0. And this is the new wave of robotics that has enabled on the self driving technology. It’s the technology of navigation. It is the connection of sensor input and affordable sensors at that, that can operate rapidly enough over a long enough distance into a computer, onboard a robot that can make decisions in real time based on that environmental data.
11:11 | AK: Now Shakey the mobile robot that SRI produced in 1974 was able to make environmental decisions based on a sense of input. But it was tethered through giant cables to mainframe computers in the room behind. What we are talking about now, is the ability for even small delivery robots, even small robot vacuum cleaners to make the use of sensor data real time in the real environment.
11:42 | AK: And that’s what makes a robot arm collaborative rather than an industrial robot arm. It’s able to assess if there’s somebody in the planned path and then re-navigate a path around the obstacle, whether it’s a person or another obstacle. And that’s exactly what a mobile robot is doing. It’s able to remap a pathway when there’s an obstacle in the environment.
12:11 | KM: The amazing thing about this robot 2.0, and I appreciate you bringing that up, is that it’s really looking at how robot technology is being incorporated into everyday consumer interactions and a lot of people when they think of robotics, of course, they think of these complicated things, but I can tell you as a consumer product design firm, we’re designing numerous inventions that have these elements of robotics, interactivity.
12:34 | KM: I mean, you look at anything in IOT or wearable tech, elements of robotics or entire robotics in themselves are being put into these things, even if it’s just small and simple arrangements. And that’s why I find it so fascinating when you really look at this robot 2.0 that you’re talking about and mention the word commercialization. And I want you to dig into that a bit, especially looking at the fact of, of robots becoming consumerized and especially to robot inventors or people that are coming up with new devices that use sensors that have something in one way or another interacts with the environment around us.
13:06 | KM: How is that? Looking at that definition is very different. And that’s why I think this is a very important episode because robotics is so integrated with so much electronics technology that’s coming out at the consumer level. So just give us a bit of a highlight around kind of how that definition has changed? Why this robot 2.0 is so important to hardware innovators, especially in the electronics sphere these days?
13:32 | AK: But 2030, your household robot will be your house. Exactly as you said, it’s robotics technologies and it spread. It doesn’t have to be all inside the box. And I think that’s the key thing for robotics, is to think outside the box. In our minds, we anthropomorphize everything. And so we tend to think of a robot like a pseudo humanoid operating in that fashion. And that is the least interesting way to think about robots.
14:05 | AK: Robots can be split into components and spread around. Think outside the box when you think about robotics. And I prefer to use the term robotics technologies a lot of the time because it takes us away from that immediate anthropomorphization of saying a robot, that’s a box over there, and it will therefore behave in certain fashions.
14:32 | AK: And indeed, talking about robotics 2.0 and consumer products. IRobot was one of the leading companies in robotics, and they’ve gone through this transition. They were the first company to commercialize a consumer robot, and that was the robot vacuum cleaner. And the first robot vacuum cleaners from iRobot were beautifully simple. They just bounced off the walls until they’d covered the room.
15:01 | AK: And I love, back in Australia we had some, and people were in love with watching them, but they would insist on ascribing intelligence to them that wasn’t there. They would say, well, it must know where it’s been, or how does it know to do this room after that room? And I’m kind of like the only thing that we do with this robot, is we have a little infrared wall to stop it falling down the stairs. And it just bounces off the walls until it’s finished covering the floors pretty much. And then it runs out of charge and it goes back to base.
15:37 | AK: The most advanced thing that that robot did was go back to base to charge. Now that’s very different from robot vacuum cleaners today because the new wave robotics 2.0, that really started in 2010 has reached those technologies. And in fact, Nito was one of the first to bring in a Lida, onto their robot vacuum cleaners. And there’s been a lot of change in who owns the different robotics companies. But firstly, one of the things, every major vacuum cleaner company now has a robot vacuum cleaner in their product lineup.
16:14 | AK: Robot vacuum cleaners are 28% of the market share for vacuum cleaners. It’s probably more these days. So it’s taken a while, but you can see from the leading edge of technology to being an established part of the market is possible for robot technology.
16:34 | KM: And it’s only growing. It growing like crazy. It’s almost like we’re at the tip of the iceberg. I’ve said it before on a prior podcast, that I believe if you look around the room, in 20 to 30 years from now, everything you touch and see is going to have a chip in it one way or another. It’s going to have some sort of connected technology or QR code or scanning device or whatever it might be to say that the something needs to be replaced or this is the part that you’re looking at or some other information that it’s relaying that’s important to the user at the time.
17:02 | KM: It doesn’t have to be like our desk are actually robotic, but it might be saying that, our sensors notice that there are certain bacterial contaminants on your surface and you might want to give it a clean. There’s lots of things that are going to happen but with all this sensor technology and everything that’s happening, we are just at the tip of the iceberg of connecting all these devices together.
17:24 | KM: But also, and I really like what you said, it’s simplifying them. So not looking at a robot like an arm that welds parts to a car, but looking at a robot, like maybe a tiny little piece that has a little sensor that does something in your desk to tell you when it’s not clean. it can be very simple and stripped down as the technology evolves, as it simplifies, as it becomes easier for developers like us to actually design the products to commercialize and all that’s happening right now.
17:50 | AK: Absolutely. And I think the distinction between passive and active sensing is shifting, as we introduce more things like temperature sensitive materials and new chemicals. The world of packaging materials is quite fascinating when you look at what’s happening, what’s coming up in the latest advances there. And so I think we will start to see responsive products perhaps as a first step. And as you said, that might not even have computation involved so much as being responsive. It’s an umbrella that opens up when the sun hits it.
18:47 | KM: Something I wanted to ask you, so if we’re looking at all this technology, for people who are creating an invention idea, that has incorporated either entire robotics technology, even as per the modern definition or components of it, what have you seen? You’ve dealt with hundreds of hardware startups in the robotics space, both on the funding side and the commercialization side and on the production side. What do you see are some of the best practices for how to succeed as your newer hardware startup emerging into the space of commercializing robotics?
19:31 | AK: That’s a great question. And I think I’ve seen thousands of robotics startups. Sometimes one of the most important things that I can offer as advice to founders is that I may have seen a half a dozen similar companies that have failed and they’ve disappeared without trace, but I do remember them and founders will say, well, we’ve done our research. Nobody else has done what we are doing.
19:56 | AK: And I’m like, well, actually they have, and it didn’t work. And I can remember these companies and this was what they were trying to do, just like you are, and this was why it didn’t work. And that can help speed up the pathway. You’ve got to look on it as a race and some of the most successful entrepreneurs are entrepreneurs who’ve done this several times before, because you are expected to have such a lot of knowledge as a startup founder.
20:27 | AK: And it can be very, very difficult acquiring that in the get go. Robotics founders were slow to attempt to commercialize difficult technologies. Primarily, I think because they’re so used to researching and they wanted to research how to grow a company without falling into these pitfalls. So I find often there are some of the best prepared founders out there, but nonetheless, there’s such a lot that you need to know. And I think we talked briefly about the three schools of the process.
21:03 | AK: And in fact, with Silicon Valley robotics, which is the robots industry association in the Bay area, our first five year plan was focusing entirely on increasing investment for early stage robotic startups because there was next to no investment. It was down in the hundreds of thousands of dollars. And now we have around 30 billion a year invested into robotics technologies. It’s been an exponential growth in the last 10 years.
21:33 | AK: But it took the first five years before traditional investors stopped laughing, when I told them robotics was ready and they should pay attention. And some of the leading firms were starting to pay attention and you can see that they have fairly good portfolios. And then the followers have joined. And we’ve seen a real increase in the number of accelerators and firms that are now offering to be a boutique investor for X, Y, or Z.
22:07 | AK: So I believed in 2015 when one of the top tier VCs cold called me, instead of me cold calling them, that we’d succeeded in our strategy of getting investment into robotics. So I looked for the next challenge and the next challenge, this is what I’m getting from the robotics founders themselves, was finding customers. And in the early stages, it’s finding your first pilots, it’s finding product market fit.
22:38 | AK: And then being able to adjust around that general area until you’ve really nailed down the exact right thing or have ruled it out completely. And this is also what the national science foundation is now rolling out in the ICOR program. And they started with medical and biotech science based startups. Now they roll it out to every science based or deep tech startup founder. The ICOR program funds you to go out and do customer development methodology, not to build anything, not to test, not to prototype, not to build, but to spend six weeks asking customers if they need what you are doing and what their pain points are, what problems they’re trying to solve?
23:30 | AK: And that is the most valuable use for your time once you’ve isolated the technology, that is your technology advantage. If you are really doing an innovative product, then you have both a technology risk and a market risk. And from an investor’s perspective, they really want you to have ruled out as much of the risk as possible before they want to invest in you. It is that course and part where a founders say, but I need to have funding before I can get the next pilots, because they need to have three robots that I can’t afford to build, et cetera.
24:11 | AK: But sometimes you have to be very fast, very creative and often privately funded or Angel funded, or look for non dilutive grants. It’s very difficult to get investment that’s worthwhile. I do see too many startup founders throw away their companies through accelerators and accelerators can take an incredible amount of your equity for comparatively speaking, small checks and small amounts of time.
24:44 | AK: Silicon Valley robotics. For example, we act at the level above that, like a meta accelerator. We don’t bring you into a cohort. We don’t give you funding, but we try to provide advice wherever you are at whatever stage you are, at whatever point you need it. So finding sources of assistance like that are far more useful than surfing from accelerator to accelerator and exhausting your equity. You become uninvestible at that point.
25:16 | AK: But non dilutive funding and or revenue and or friends of family and Angels and a strategic investor, that is coming from the industry. I’ve seen some great robotic startups or hardware startups getting funded through things like agricultural associations, for example, or pension associations for particular healthcare related things. In fact, it was a group of orthodontists that funded a robot for dental surgery. And that is brilliant because from the very start you can go, okay, we know what our product market fit is because our market is funding the development of this product.
26:02 | KM: Well, you’ve got these two things and we could go into the manufacturing, which is the third pillar. But looking at the funding and the product market fit, those things somewhat go together. And I love how you mentioned the funding in terms of private, because that’s a big misconception in any consumer product. The key is that in a serious investor, who’s going to give you a fair price, they want to see some traction, but even just early traction. So it’s getting some of that customer engagement. And maybe even selling some or trying out some light prototype units or something along those lines to prove that the market A, is willing to buy it and B that they like it once they actually do buy it.
26:41 | KM: Or getting some of that feedback from potential customers, whether it’s a letter of intent or some other thing that really helps you as a startup say, look, I’ve validated. And you mentioned it, the technology. Because an investor really wants to know. Well, okay, it’s a great idea. And I understand the use that you’re going to solve and sure somebody’s going to buy it if you make it, but can you even make it?
27:01 | KM: And of course that’s where understanding the technology, getting the designs, maybe even light prototyping, whatever it is to say, okay, no, look, here’s the technology. I built it. I know how it works. I just don’t have the money to now commercialize it. I need to, like you say, build three of these things to give to three customers to then get, more formal, maybe quotes from manufacturing, to get price points ironed out or whatever the next steps might be.
27:23 | KM: But the big key that, when you tie in this customer to funding, is the fact that the further you push it privately either yourself, if you’re an engineer yourself or whether you’re friends and family funding, or even angel funding to get you further along the chain. The further you go in both the technology and in the customer interest, the exponentially more valuable your company becomes. You’ll get much more money and give up much less equity the further you push it.
27:51 | KM: And absolutely, I see it as well, especially in early, super early stage startups because they think, well, you know what? It’s worth nothing today. So yeah, I don’t mind giving up half the business because I prefer to have something than nothing. That’s easy to say looking forward. I can tell you everybody who’s done that when you actually succeed in the product, looking backwards, regrets it enormously because it’s easy to say looking forward. But when you’ve got a multimillion dollar product down the road and you’ve got interest and you’re scaling and you’ve given up 90% of your company for peanut on what you could have done, if you had have just self-funded or at least just pushed it forward through private funding, that is when you’re going to start regretting it.
28:32 | KM: Because like you said, Andra, that can actually stifle your ability to scale. It may plateau you because you have no more equity to give. So it’s brilliant how you pull those two together. I appreciate that.
28:43 | AK: Or as we see in many cases you go bank corrupt and a year later, all of your assets and IP are acquired by one of the big competitors and that allows them to integrate your product ideas. So sometimes you’ve got to realize it can be a competitive world as well. So you can fall into a couple of pitfalls. One of the pitfalls is getting too many expressions of interest from the research arms of companies, as opposed to the operational arms of companies.
29:25 | AK: So the KPI for the research and innovation group is to go out and find as many interesting startups as they can. They will write you letters of intent untill the cows come home. The people you’re actually going to sell to, once you go past that unit of one are your operations people.
29:43 | AK: And that’s another thing that investors look at, is this going to translate into larger demand? Have you really understood the problems and the sales cycles of your final market correctly? And as you said, the third leg of the store, which is so important, is if you’ve navigated your technology risk, you’ve got an innovative product and you’ve got an IP strategy and your first in the field, and then you’ve navigated your market risk.
30:13 | AK: So that you’ve found the perfect product market fit, for example, you’ve got orthodontists funding you for a dental robot. Then the next thing is going from the unit of one to the unit of many, and that is such a stumbling block. So that’s the third leg of the stool prototype to product and avoiding. I know so many startups that build what they can with the materials that are to hand and technology that they can use. So they’ll cobble together something on raspberry pie or aveno or one form of prototyping because it’s accessible for them and they can do it without having the money to pay for their next kind of level up.
31:01 | AK: But it can lead them in a dead end when it comes to manufacture ability because they’ve relied on components that are not accessible, that maybe no longer easy to get. Certainly we find with sensor technologies that can be hard to get your hands on the sensors that you need at the moment.
31:22 | KM: That’s quite common. We do a ton of projects, which people come to us with their adrenal boards and say, okay, we’ve got this prototype rough out, it works. The market likes it. This is great, but we know we need to now redesign it from the ground up. But generally it’s from a cost perspective because those boards to produce, in the thousands of units especially, it’s very expensive. You’re buying essentially a whole computer when all you need is small PCB with maybe a few inputs and outputs.
31:48 | KM: So that’s quite common. I still think, there’s a ton of value in getting to that point, but just understand that last pillar is important. You do need to figure out now how to manufacture the thing. And don’t think that once you’ve got to the end of prototyping and you’ve got market fit that your job is done because that’s where you really need you to either raise your next round, a much more significant round to then do all the hardcore detailed engineering to make a manufactureable product.
32:13 | KM: Something that both can be made in volume, like you said, a lot of parts, especially right now with global supply chain shortages, you have to be very cognizant of how you’re designing something based on what you think you’ll be able to order in volume. And then as well, making sure that the cost is reasonable. So you’re not overcommitting to a product, you’re not having a full computer and a product when you only need a small PCB. A $2 part, as opposed to a $35 part, is going to be very difficult.
32:37 | KM: That’s your entire margin baked into that product potentially. So definitely designing it forward, but keep it in mind that if you’ve done a good job on the first phases, you’ve designed it well, you’ve also got the funding and you’ve got some market fit that should lead you to a very nice position to raise a very fair and proper funding round at that point, to get you through that final engineering design for manufacturing phase and your production, which is very expensive to set up tool up, get moving smoothly, let alone making sure it’s working well, defects, refunds glitches, all that sort of stuff, all that has to be ironed through, all that cost time and money. But that’s a really good position to then get it to market if you’ve done the first two legs of the stool well.
33:22 | AK: Exactly. And there are so many traps within that commercialization stage, as you talked about, returns for example. How often is that something that you factor in and when you’re doing something for the first time, how do you know how long it’s going to last, what it’s robustness is, what standards it’s going to meet? I have seen some early stage companies, again, primarily in robotics, but I’m sure this happens everywhere, where they’re still at the product market fit stage, but at the same time, they have a unit on a treadmill or in some other testing type facility.
33:59 | AK: And they’re working on finding out where the boundaries are for the technologies that are essentially part of what they’re doing. The other thing I will say is that for quite a long time, the theory has been that China is where you go to manufacture and it’s 10 times cheaper. But in many cases you swings and roundabouts. It actually costs you a lot more in terms of staff time away and the need for constantly being in attendance in those processes and it’s like your actual manufacturing might be lower, but the cost that is on your shoulders to deal with that and to deal with something that perhaps hasn’t reached the quality standards that you needed has been miss machined.
35:00 | KM: All of that. Well, there are only three costs in production and people only look at one of them. One, there’s your direct cost? That’s, foreseen. Two, there’s your direct cost that’s unforeseen. And then three is really your unforeseen costs or your indirect costs that aren’t exactly obvious in a direct dollars and cents basis. And between those three people only look at the first, but you really need to factor in what is your overall cost of these three things combined when you’re weighing your decision on manufacturing locally. But not just that, the types of manufacturing, the volumes you’re looking at international versus local versus different types of production methods.
35:47 | KM: And then where you’re actually trying to go with your business has a lot to do with it. Are you looking to generate interest to get an equity round? You might not need to sell many units, or are you really trying to prove that you old volume quickly? Well then maybe it’s a cashflow play, depending on what you’re trying to do with your business is going to very much make the manufacturing decisions more complicated.
36:07 | KM: Now what I’ll say to kind of wrap it in a bow, the major silver lineage to all this and something, psychologically you have to think about when developing a product is yes, it’s a bit of a marathon, but your comfort should be in the fact that if you go through all these things and you figure out, you get your funding in order, you build the technology, you get the product market fit, you comb through it, and you fight through it and you get your manufacturing going.
36:31 | KM: Your company now is exponentially more valuable than it was before. You have really created something legendary. And I’m sure Andra, you’re seeing it with a lot of companies, the valuations that they’re getting bought out for. The big companies that are looking at these new emerging technologies, those valuations are only going up and up and up. And that is really, the end goal potentially. I mean, you could build a business out of it or you could sell it outright, but the reality is, if you actually fight the fight to get through all these things, it can be a tremendous, it could be a lifelong value to you as an individual.
37:07 | AK: Absolutely. And we are seeing the investment into these areas is on the increase. The valuation is on the increase. And I would argue that most deep tech companies, most hardware companies, most robotics companies are still undervalued at the say series C and beyond round. People underestimate the power of spreading physical product in the world. We’ve become used to a kind of software valuation, which is a little bit more easy spread, but then also easily changed, whereas I think you create a more inherently lasting value.
37:52 | Voice-over: Thanks for tuning in to this episode of the Product Startup podcast. The show that teaches you what it really takes to bring your product to market and turn it into a big success. This podcast series is brought to you by MAKO Design + Invent, the original and leading firm in North America to provide global caliber end-to-end physical consumer product development to startups, inventors, and small product business clients. If you’re looking for product development help on your invention, head over to makodesign.com. That’s M-A-K-O design.com, for a free consultation from one of MAKO Design’s, four design studios from coast to coast. Thanks for listening and see you next time.
Andra Keay / Silicon Valley Robotics Links:
- Website: https://svrobo.org/
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- YouTube: https://www.youtube.com/channel/UCKRT4z1I9fAn8LUgUaOQACA
- Twitter: https://twitter.com/RobotLaunch
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Kevin Mako Links:
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Thanks for tuning in! See you next time.
About Us: MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to small businesses, startups, and inventors. Simply put, we are the leading one-stop-shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories. Also, our founder Kevin Mako hosts The Product Startup Podcast, the industry’s leading hardware podcast. Check it out for tips, interviews, and best practices for hardware startups, inventors, and product developers. Feel free to Contact Us anytime for help with your project.