Hardware is Silicon Valley’s new religion. At maker spaces like TechShop, hardware startup accelerators like HAXLR8R and Lemnos Labs, and conferences like O’Reilly Media’s Solid, there’s one overriding article of faith: that bits and atoms aren’t so different after all. Just as the cost and complexity of starting a software company has drastically declined over the last decade, the creed goes, it’s now becoming cheaper and easier to start companies that make physical things.
Talk to almost any real hardware company, though, and you’ll discover that the promised land is still some distance away.
Don’t get me wrong: there’s definitely an amazing boom in hardware innovation underway. Consumers have more cool stuff to choose from than ever before, thanks in part to the rise of flexible, low-cost manufacturing facilities in southern China. A case in point: the fixed bicycle light system from Sparse, a small product design startup based in San Francisco.
The battery-powered Sparse lights, which are made and assembled in Shenzhen, are so slick and streamlined that they look like somebody fused an LED flashlight with a Tesla Roadster. But Sparse CEO Colin Owen, an industrial designer who built the lights with help from backers on Kickstarter, says there are still a million reasons why the design and manufacturing process can give entrepreneurs saddle sores.
“It is not easy,” Owen says. “The analogy I would make is to when you first futz around with 3D modeling software. It’s joyful and fun to do something, anything. But the frustration comes when you want to do a particular thing. You want a representation of what is in your mind, with specificity and correctness. And that’s very hard to achieve, for random reasons.”
Indeed, Sparse fell more than a year behind schedule delivering its finished bike lights to some Kickstarter backers. Owen says the company ran into one unforeseen difficulty after another—problems as varied as deficiencies in the metal die casting process and a flaw that delayed safety certification of Sparse’s plug-in chargers in Europe. “We had all the t’s crossed and all the i’s dotted and still there was a big daily surprise,” Owen says.
The truth is that such snags are the rule rather than the exception for crowdfunded hardware projects. Eventually, Sparse worked through the biggest challenges, and Owen is now designing the startup’s next generation of products for urban cyclists. But having interviewed many other hardware entrepreneurs, like the husband-and-wife team behind the Nomiku sous vide circulator, I think I’m correct in saying that life is still a lot easier inside a software startup.
When your product is an app or a Web service, you can make big changes with a few keystrokes, ship them instantly, and get customer feedback overnight. With hardware devices, the smallest process or design change can lead to weeks of negotiations with manufacturers and resulting production and shipping delays. And that’s all before the product ever reaches the first customer.
The process is getting easier—and until recently, it wasn’t open to small teams with small production runs at all. But it still takes a special kind of vision and endurance to be a hardware entrepreneur—which is why I think people like Owen are today’s true startup heroes.
But let’s back up a bit. In November 2012, I singled out 12 Kickstarter projects that every geek should support, including the Sparse lights, and contributed $10 to each one, as a small show of support for the courageous creators and entrepreneurs using the platform to pursue inspiring projects. Six of my pet projects ultimately surpassed their fundraising goals. Four fell short, and two were canceled.
Sparse was one of the lucky ones: it raised $66,386 to build its theft-proof front and rear bicycle lights, beating its original goal by more than $20,000. It was also my favorite of the bunch. I got an inside look at the lights from Owen at Sparse’s then-headquarters, a studio in the Dogpatch neighborhood of San Francisco, on the day before the Kickstarter campaign ended in December 2012.
But then I got busy, and fell out of touch with Owen (a former Nike, Intel, and NASA design contractor who is former acting director of the industrial design department at the California College of the Arts). Recently I learned that the Sparse lights were available for online ordering, and I bought my own pair, for $140. They’re great, and they make my clownishly large Specialized crosstrail bicycle (it’s XXL-sized, to fit my 6’3” frame) look a little bit cooler—maybe even like something you’d find parked in the Batcave.
My happy customer experience prompted me to get back in touch with Owen, to find out how Sparse had fared during the inevitable long march that begins when a successful hardware crowdfunding campaign ends.
Even though the Kickstarter campaign put enormous pressure on the seven-person startup to get the lights into manufacturing—so that finished units could be delivered to the hundreds of backers who pledged $50 or more—Owen says he’s glad the company went the crowdfunding route.
“It’s validation in as many different senses of the word as possible,” he says. “One is that you find the sets of people who are and aren’t interested in your product.”
Who, exactly, would be interested in bike lights that cost $140, when a pair of plastic removable lights from a company like Cateye will only set you back $25 to $40? Well, as you know if you’ve ever left your bike locked and unattended in a dense urban area like San Francisco, bike thieves are numerous and ruthless. They will steal every component that’s not riveted down. The original idea behind the Sparse lights, conceived in 2011 by Owen and his original co-founders Remy Labesque and Nick Riddle, was to spare urban bike commuters the trouble of remembering to remove their removable lights, by building units that would be impossible to steal without disassembling the bicycle itself.
The Sparse lights, made of cast zinc, have collars that fit around a bicycle’s handlebar tube and seat post (see the slide show above). They can only be removed if you have the special tools required to loosen the handlebar and seat assemblies. But in addition to being unpilferable, they’re gorgeously styled, waterproof, and attention-getting, with energy-efficient LED lights that the company calls “stupidly bright” (I concur). The internal batteries can be recharged using the included micro-USB cable, and they last at least 4 hours.
It turns out that quite a few people are interested in such a product—enough to make Sparse profitable in the last two quarters. (Though only ramen profitable, meaning no one’s being paid a salary yet. That’s buying the fully bootstrapped company some time to raise outside money.) It would have been hard to drum up serious demand in the company’s main markets—Europe, North America, Japan, and Australia—without the media attention generated by the Kickstarter campaign, Owen says.
The campaign also helped Sparse determine what types of lights, in what combinations, customers would want. The black finish turned out to be twice as popular as silver, for example, and 80 percent of backers wanted a front-and-rear set, rather than a single light. “We didn’t anticipate that, and it allowed us to reprioritize our packaging plans,” Owen says.
But the campaign couldn’t prepare Owen and his small team of designers, engineers, and interns for the problems they’d have to tackle in 2013. Owen had always known, for example, that the company would need more funds, so he applied for and won a Small Business Administration loan, which paid for the first production run in Shenzhen.
But Sparse’s manufacturing partners there initially had trouble making the die-cast metal parts to the right tolerances, and there was a high rejection rate for units with the silver finish.
“I really care about making things perfect, and it takes a certain amount of time to solve things when the problems crop up and the information has to filter up the supply chain,” Owen says. “It can take you a week to see if they are shipping the same part you presented to them.”
Owen is careful to say that he respects China’s contract manufacturers—in fact, he’s grateful to them for paying any attention to a startup like Sparse when they have “bigger fish to fry.” (On one trip to Shenzhen, Owen says he saw “stacks of Barbie legs going to the ceiling.”)
Sparse’s decision to package each light with a USB wall charger—rather than asking customers to tether their bikes to their laptops—multiplied the difficulties, since North America, Asia, and Europe all use different types of outlets. “It means we’ve tripled our SKUs, which becomes a real supply-chain management issue,” Owen says. “Do you have enough of the right product in the right region? It’s really hard to predict demand when you’re just starting up. If you have to repack units with different chargers, that will kill the business really quickly.”
And as it turned out, the charger designed for the units going to the European Union would fail the certification process for consumer electronics devices three times—apparently due to insufficient insulation in one of the cable sockets—before it passed. That problem alone caused a four-month shipping delay. “I wish there was more of a handbook for these things, but the biggest hiccups were very localized and unpredictable,” Owen says.
The biggest lesson Sparse had to learn, Owen says, was “how little momentum each element of the endeavor has. There is no moment when things just start to spool up on their own; you have to keep kicking the tire up the hill. You are a startup. You are on your own.”
But Owen reiterates that he isn’t complaining. He calls the endless attention to detail “the price of real innovation.” And the reward, of course, comes when customers discover the product. “You realize you’ve solved a problem for them and that they’re willing to incorporate your solution into their daily riding routine, and that’s great. That is super fun, and I think we are on to something.”
Owen acknowledges that the fixed light system is still a bit of a niche product—you have to be willing and able to take your bike apart to install it. But now the company is working on a suite of other items for cyclists that will be “slightly more mass market but equally well built,” he says. That will likely include theft-deterring security bolts for wheels and other bike parts; bags and backpacks; and apparel.
The unifying theme: removing the impediments to bicycling as a primary mode of transportation. “We have a mission, which is to change the face of mobility,” Owen says. “We’re all about the most efficient use of resources, and bicycling is a great way to minimize consumption.”
And if the accessories for your eco-friendly bicycle are a little bit cool, a little bit aspirational, that doesn’t hurt. In fact, Owen says it would be fine with him if people started buying Sparse’s lights simply for their beauty, rather than for their theft-deterring design.
“I’m not dogmatic about it,” he says. “The beauty is the hook into somebody’s routine.”