Many product ideas require hardware for sensing, user interaction, etc. Until recently, it has been difficult & expensive to bring the hardware component of a product to market. Developments such as low cost rapid prototyping & manufacturing, energy efficient parts, crowd funding, etc, have made it easier for small startups to get into the hardware game. Everything from design, production, and fulfillment can be outsourced to quickly bring a device to market without the expense and time of bringing up in-house hardware teams. These trends are accelerating, so now is the time to create the next great product idea. Learn how to take advantage of these trends and focus on the core value of your product that makes it unique, the software.

1. Don’t Stop at Software:
Make Hardware Too!
SXSW 2013
Denis Bohm
denis@fireflydesign.com
Welcome to “Don’t Stop at Software: Make Hardware Too!”. My name is Denis Bohm.
I have a lot of experience in software development. I have also produced my own
activity monitors as well as designed activity monitors for other companies, such as
Zamzee and LUMOback. This talk for people that have a software product in mind
that requires some hardware.

2. Hardware is Enabling
Fulfill your unique technical requirements
and control the full user experience.
For example, let’s take a quick look at activity sensing. There are many different
types of activity sensing applications - each with its own unique requirements. Some
devices are targeted at adult fitness where the users are willing to wear chest straps
to monitor heart rate. Of course there are many more types of activities, such as
yoga. Each of these would require their own unique solution. This is really just the
beginning for these types of applications...

3. Software is Core
Focus on the core value of a product - the
software.
Even though hardware enables, the software is where many people want to
concentrate their efforts to provide a unique user experience. Focusing on the higher
level software allows you to bring the most value to your users. There are a number
of areas where you may want to differentiate the software for your application. On
the device, real time processing algorithms are often essential. They can distill the
raw data into a form that will be used to provide feedback to the user and that is
small enough to be uploaded to the cloud. Aggregation and analysis of data
transferred to the cloud is a common requirement. Of course user interaction via
apps and web sites are essential parts of the user experience.

4. Now is the Time
Outsourced design, rapid prototyping, low
volume production, crowd funding...
There are a number of advancements that are now coming together to make it easier
than ever to create hardware. For example, open source hardware, rapid prototyping
of both electronics and mechanicals, and crowd funding. 3D printing is one of the
advancements that makes it much easier to prototype certain parts. Small plastic
prototype parts can be made for under $10 using services such as Shapeways. These
things all contribute to lowering the barriers to get started with hardware.

5. Technologies
Radios, sensors, low power...
Another reason it’s easier to develop hardware now is new technologies. Radios,
sensors, and low power advances are opening up a diverse set of applications.
Bluetooth Smart radios allow you to minimize the device user interface by providing
most interaction within an app, rather than on the device. This allows the device to
be smaller and use less power, while also being easier to use. Your application is in
control of the pairing process which gives you more ability to optimize the full user
experience. Sensors provide essential data (accelerometers, magnetometers, gyros,
pressure sensors, heart rate sensors, light, humidity, temperature, etc). Low power
technologies are evolving quickly (microcontrollers, power management, energy
harvesting, thin batteries, etc). The changes in battery technology are starting to
open up new form factors for devices.

6. Device Specification
• Form Factor, Size, Weight, Water
Resistance, Temperature Range
• User Interface, Algorithms
• Communication, Memory Capacity, Updates
• Battery Life, Charging, Storage & Shipping
• Testing, Certifications
The place to start on a new design is with a device specification. Clearly and
concisely specify the user visible aspects. Keep it short but thorough- a few pages at
most. Do not specify the implementation. For example, don’t specify that you want a
specific radio or memory chip - specify what communication should happen with the
smart phone and how often. These are some of the things to put into your device
specification. This should give you some idea of what to think about. Some of these
have standard values, such as temperature range - so you won’t have to put much
effort into those for typical applications.

7. Outsourcing
• Product Design
• Industrial Design
• Mechanical Engineering
• Electrical Engineering
• Software Engineering: Framework & API
• Manufacturing
Once you have a specification how do you get the device made? Virtually all aspects
of hardware development can be outsourced, not just the manufacturing. There is a
large range of design services available - from multidisciplinary individuals to larger
groups with many people each in a different discipline. In general, the larger groups
will tend towards much higher NRE and tend to design for high volume production
which may make bootstrapping more difficult. Make sure the people you chose have
a realistic understanding of your budget and growth strategy and are a good match in
those respects. Note that it does make sense to outsource some of the software
development that is not specific to your application. For example the base firmware
in the device as well as the APIs for a smart phone or PC that communicate with the
device. Make sure that the team you choose will create the test fixtures and software
to program and test the devices during production.

8. Volume Matters
Design both the electronics and mechanicals
for low volume production first.
When choosing a hardware team one of the first things to discuss is your production
volume. Be sure to design for low volume production first. Do not design for high
volume production until you are ready for it. Designing for high volume production
too early will increase your up front costs significantly. Once you have a proven
product that is on a growth curve then you will have the time and money to optimize
your design for high volume production. When your product is in the hands of users
you will start to learn things so it is best to get your device out quickly and then take
time to iterate. Designing for low volume production will let you do that. Some areas
to focus on when designing the electronics for low volume production are: self test,
easy firmware upgrades, automatic diagnostic uploads to the cloud, hardware reset
capability, etc. For the mechanicals try to keep it simple: minimize custom parts,
avoid irreversible steps such as gluing & sonic welding, minimize final assembly
complexity and time.

9. Per Unit Cost
Example: Activity Monitor
10 Units: $375 Each ($3,750)
100 Units: $100 Each ($10,000)
1,000 Units $60 Each, $50 Next Order
($60,000, $50,000)
10,000 Units $40 Each, $35 Next Order
($400,000, $350,000)
The price your company must pay to produce devices is your per unit cost. Note that this does not include NRE or
markup. The per unit cost depends on the quantity made. The different quantities are typically: 10 units for
prototyping, 100 units for user testing, 1,000 units for low volume production, and 10,000 units or more for high
volume production. Here are some example production costs based on an activity monitor I’m currently
designing. The average end user price for such an activity monitor is around $150. In this case it is possible to
produce 100 devices and still make some margin. Achieving reasonable prices in small quantities lets you start to
test your market very early and make adjustments to the design before moving to high volume production.
There is some additional NRE that comes into play at the 100 to 1,000 unit volume. While 3D printing is great for
prototyping, for a number of reasons, it is still necessary to use injection molding for production quality plastic
parts. There are some low volume injection molding solutions, such as aluminum molds, which can be used to
minimize that NRE. FCC testing is another example of something that must be done before units can be made for
sale. This type of NRE can be factored into the per unit cost for the first batch at that volume. In this case if
subsequent batches are made they will be a bit cheaper since the NRE cost will not be incurred again.

10. Don’t Stop
• Create a succinct device specification.
• Design for low volume production.
• Outsource hardware design.
You don’t need a lot of up front money. You don’t need your own internal hardware
design group. Don’t give up on a great idea because it requires some hardware.
Don’t stop at software: make hardware too.

11. Thank You
Questions, comments, ideas?
Denis Bohm
denis@fireflydesign.com
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