The Hardware Startup

Chapter 6. Manufacturing

At some point, all successful hardware startups will have to face the challenge of manufacturing their products at scale. Manufacturing involves a bit of a different mindset than prototyping. Prototyping is full of experimentation and invention, while often burning money. Manufacturing is about process and, hopefully, eventually making money. Prototyping is making one of something; manufacturing is making something that can be made over and over again by people you don’t know.

This can be a hard and expensive transition for a young company with limited funds. Often, schedules slip, which means that it takes longer to gain revenue from selling the product. Also, working capital, the money used to fund inventory, is necessary to get the product manufactured.

This chapter is a companion to Chapter 5 and should not be read in isolation. During your prototyping process, you will make many technical and business decisions that will ripple throughout manufacturing, so we have chosen to cover those in Chapter 5, to make sure the issues are addressed early enough.

Here are a few terms you will find used to describe different kinds of manufacturers:

Original equipment manufacturer (OEM)

A company that makes the original parts, components, or assemblies that go into a product.

Original design manufacturer (ODM)

A company that specializes in manufacturing products for other brands. This approach is often known as a white label, since any company could approach ...