A guide for Startups working with Product Design Companies

We are frequently asked if we work with startup companies. The answer is a qualified ‘Yes’: While most of our business is with established businesses, we do work with startups, when they have realistic expectations about their business and about development.

When we work with startups, we often need to provide more coaching and guidance than we do with mature businesses. Over the years, we have built this list of questions and answers that may be useful to startups trying to learn more about product design and development:

 

 

What are some approximate costs for prototyping and manufacturing a small sensor gadget?

As an example, 10,000 pieces of a temperature or humidity sensor in a plastic case the size of an egg (approx) which had these basic abilities – Bluetooth (for initial programming from smartphone), wireless (for communication with the home or office network) as well as a very rudimentary sensor (a microphone in this case). It would only need a relatively tiny amount of memory and processing power other than what’s needed for the Bluetooth and wireless. In addition to the small about of internal logic, it would need a small application for settings and the wireless would simply push out a small amount of numerical data like a temp sensor, etc.

Assuming outsourcing of all parts – any estimates on the total R&D and then on the per piece once it’s developed.

The per-unit price could get really low if volumes could be driven up. Development costs could come down if you could identify some combination of existing subsystems (likely at the expense of some features) rather than starting from scratch. I suppose if I had to guess, I would say $60k-$300k in development, $30k-$90k in prototypes and tooling, $3-$20 per unit if you can get your volumes closer to 100k units.

Will SGW Deisgnworks enter into a revenue sharing agreement for a new product idea?

We are asked about this very frequently by new clients that are just getting a business off the ground and need help with their product design. We generally are not able to work for equity or for a back end revenue share. If you are serious about getting the design consultants into this arrangement with you, I would make sure that you approach them as though they are a prospective investor (which they basically are). That means you should have a really compelling market case and business plan. In addition, make sure that you can demonstrate to them that you do indeed have the ability to get the product launched, marketed, maintained, and serviced.

I need a Prototype: How much will that cost me?

This is the first question that many new clients come to us with. It is certainly a valid question: the person asking is trying to understand what they should expect for development costs prior to a hand-off to manufacturing.

As we step into the conversation with the client, we ask a lot of questions about how the prototype in question will be used. We believe that every prototype exists to answer questions.

Very early prototypes may be used to validate use-case or address some high-risk functional items. Late stage prototypes may be used as sales presentation tools at trade shows, kick-starter videos, or for more in-depth user feedback.

The image above shows a mid-phase prototype that was used to validate and iterate electronics functionality. While critical to development, it does not yet represent a production-ready design.

It is common for the client to be referring to a manufacturing-ready design, with a representative prototype when they ask the question. This is something we can provide – but it often takes multiple phases of development and prior partial prototypes to get there.

Is SGW Designworks able to sign NDA's?

Generally, we are willing sign nondisclosure agreements. We prefer to use our own, but can review others as well. Typically, we are able to get through an initial high level discussion without the need for an NDA. This allows us to make sure both parties feel that SGW Designworks is a fit for the prior to the administrative step of signing the NDA.