Launching and growing a hardware business differs in many ways from a software or services company.  In this Phase Dock LIVE, two hardware company founders share their experiences, lessons learned, and tips for inventors who hope to launch their own companies someday.

Guido Bonelli (Dr.Duino) and Chris Lehenbauer (Phase Dock) were featured in a Phase Dock LIVE broadcast, March 13, 2021.

In Part One (this post), the founders talk about:

  • What drove them to launch their businesses
  • A successful Kickstarter
  • Distribution models that worked and didn’t
  • The importance of Market Research with links to key resources

Part Two topics include:

  • STEM education and mentoring
  • The  problem/s solved by Dr.Duino and Phase Dock products
  • Entrepreneurship and the “wearing of many, many hats”
  • The importance of support and the value of feedback
  • Tools and the tech stack for e-commerce
  • Thoughts on product development and SKU management
  • Pricing and product quality

There was a problem with upload speeds during the LIVE webcast, so we went to audio only. This is a transcript of the audio, edited for length and clarity.

CHRIS: Hi, friends—I’m Chris Lehenbauer, CTO and founder of Phase Dock.

Phase Dock Founder, Chris Lehenbauer

Phase Dock Founder, Chris Lehenbauer

Welcome to the April edition of Phase Dock LIVE. We’re happy you are here.

If you are new to Phase Dock, we’re a manufacturing startup here in Raleigh, North Carolina.  We focus on systems to mount, organize, protect and transport single-board computers and microcontrollers, so we inhabit the mechanical side of projects more than the actual electronics.

In this show, we’re going to talk about what it takes to develop and sell hardware products. If you have a great idea for a hardware product, this is the show for you!

Our featured guest today is Guido Bonelli, the founder and inventor of the Dr.Duino line of electronics. Guido started Dr.Duino way back in 2014 on the ever popular Kickstarter crowd-funding platform.

Today, he has a range of Dr.Duino boards and thousands of units sold worldwide. Guido’s mission with the Dr.Duino brand is to expand upon the awesome Arduino microcontroller platform by providing equally awesome and unique shields for the hobbyist, inventor, DIY’er or anyone else curious about Arduino.

Welcome Guido. Tell us a little about yourself and how you got started.

GUIDO: Thanks for having me.

Dr.Duino Founder, Guido Bonelli

Dr.Duino Founder, Guido Bonelli

Dr.Duino actually came out of a dog walking tool I called ShaPooPee. It failed rather spectacularly on Kickstarter. After that. I took a little break from inventing stuff. I had just moved into a new home and I wanted to make something for the house.

I started mixing laser cutting with electronics, so I created this thing called ORBIS. It’s on Hackaday.

As I was working on it, I brought in the big name-brand tools. I knew pretty soon I didn’t want that level of complication in this particular project. With the other tools and emulators, it took forever to get the blinking LEDs going.

I wanted something simple and eventually found the Arduino.  I was like, “OMG. This thing is amazing.”

ORBIS controller

ORBIS controller

ORBIS Kinetic Sculpture

ORBIS Kinetic Sculpture

At that time, Radio Shack was still open, so I ran out and got an Arduino. I was astounded that within five minutes I was up and running with a blinking LED. That was a game-changer. And I thought, “Whatever this thing is, I want to explore it!”

As I began to build ORBIS, I realized that the Arduino system is fantastic. The problem I ran into was debugging it. As you start to stack more things on top of it, you lose the ability to access the middle layers.

At that point I began to think about how to bust out all the pins and allow you to use real tools such as an oscilloscope, and so on.

After I did that, I thought “Other people might really like this.” And as they say, “The rest is history.”

CHRIS: Thanks Guido. To your point about early failures, we started out by reverse engineering an Astro Pi case. The Astro Pi is a platform used by the European Space Agency to send Raspberry Pis out to the International Space Station.

Astro Pi RDX Case

Astro Pi RDX Case

We build it. Got a beautiful model.

Nobody had ever done that before. And we thought we were going to sell these things.

It flamed out because we didn’t think about the fact that most of the people who wanted an Astro Pi were actually in Europe. We didn’t really research how to market to Europe and how to send product to Europe from America…which is a lot harder than you would think.

That was our false start where we had to regroup and pull back. Honestly, if you can’t do that, you’re never going to be able to stand up a hardware company. There are just that many hurdles to get over.

So after your initial false start, how did you bring the Dr.Duino idea to reality?

GUIDO: I did a Kickstarter in 2014. It was fresh off the heels of the project that didn’t do so well so I was pretty nervous about launching another one. I think that is something about entrepreneurship…no matter how many times you fall flat on your face, you have to get back up, dust off, and try again. The important things is to learn from why you face-planted the last time.

So when I went live with my second Kickstarter, I made an effort to reach out to a bunch of bloggers. At that point I didn’t understand how to do Facebook marketing or anything, so I went with a more traditional approach to try to get the Dr.Duino brand into some other outlets.

I was fortunate enough to contact a gentleman named Clive Maxfield. That guy is amazing. If you ever get a chance, check out Max’s Cool Beans. He has phenomenal articles on everything from AI and really crazy projects. He’s an awesome guy. He featured me a few times on Design News, or one of the old websites at the time. That’s kind of how I got my start.

CHRIS: We found that as well. The marketing side is way, way harder than the engineering side. And the engineering side is hard enough. Somebody said, “You have to be aggressive about learning from other people’s experiences.”

It’s tough to make that many mistakes and recover from them by experimentation. We’ve done a lot of reading, but you know what has been helpful is to reach out to other entrepreneurs like yourself. We met a lot of folks through the Maker Faire community. That’s been huge. Just forging relationships, learning from people, and sharing information.

That’s probably been the best part, I think, of this entire business for us…the people we’ve gotten to know and the interesting things we’ve learned. I would echo that.

So how did your Kickstarter go?

GUIDO: Yeah, Kickstarter went really well. It was 128% funded in the 30 days. It was amazing. I had so many people that were incredibly generous. I’d never met these people and they were shooting me messages like “What you are doing is fantastic. Keep going.” I remember one backer who initially backed me for $100 which is by far more than what I had as one of my tiers, and then, just before the closing of my Kickstarter I see a $700 pledge come in. I’m like “$700? I don’t even have anything like that.” This guy really loved what the Dr.Duino product was going to do for him.

Kickstarter is just an awesome community. You know, like-minded people who are just trying to get started. A fantastic platform.

Early on, you guys were thinking about doing a Kickstarter too, weren’t you?

CHRIS: Yeah. We talked about that in the past, but we’ve kind of pulled back from the idea. We’re in a little bit different situation than you are. We do all our own manufacturing. We haven’t actually put in for patent protection on our designs. That’s a really long complicated story in itself, so we’re a little concerned about copycat versions before we get fully established. That’s in the back of our minds as well.

That’s something I would say to anyone who is thinking of going forward is, “If you think that what you are doing will need some intellectual property protection, you should factor that into the process. If you go the formal route with a utility patent, that is an extremely expensive proposition. That is part of your cost of development. If you are not going to be able to recoup that, that’s bad. And if you do go ahead, you’re going to have to amortize the cost of the patent over a certain number of products that you sell.

So, what we did instead was show at Maker Faires, Guido. That’s how we got to know you…through our very first customer, Fred Warden [Hi Fred!]

The live shows were really huge for us in the first year-and-a-half or so. Of course, that has been problematic because the financial issues shut down the larger Maker Faires, and the pandemic slowed down the smaller ones. So we went online.

But you’ve been online from the beginning. That’s your primary sales route isn’t it?

GUIDO: Yeah. Purely online. For me, that was the best route. As you’re building any product there is constant that pivoting that you are doing. I had worldwide distribution at one point. And even in Microcenter, and in Europe and in a bunch of different spots.

Over time it just made more and more sense to keep everything in house and distribute solely from the US.

CHRIS: That’s a big part of the equation. We also do our own packing and shipping. It’s good because it’s completely in our control. If something happens, we know what it is and we can fix it right away. The downside is, that’s a lot of overhead in itself, right?

GUIDO: Oh yeah. In the beginning I was still shipping from my garage. Until I got to a point where I simply couldn’t handle the volume. The kitchen was overflowing with Dr.Duinos. My living room. Every drawer that I had had a Dr.Duino in it.

That is a call that every entrepreneur needs to make. They are fine lines, but expensive when it comes time to make tradeoff and say “I’m going to stop distributing from my garage and start doing this from an actual facility.”

CHRIS: That’s what has happened with us. This company has totally taken over our house. Perhaps worse because we’ve got production equipment and raw material as well as saleable inventory in the house. It’s typical for us to have boxes in the living room, or we’re assembling product on the dining room table. So, we’re 100% there with you.

But now you’ve outsourced fulfillment, haven’t you?

GUIDO: Yes. My fulfillment is now happening out of Chicago, Illinois. They’re a great provider. Actually, they work hand-in-hand with Amazon. To be honest, I don’t fully understand it but they work within the same network. Chicago is a major distribution hub for anything that ships into the US. When things come in through the ports, they primarily go into Chicago. Having the fulfillment center there helps with shipping costs.

CHRIS: We’re a marketplace supplier to Digi-Key. That’s been an interesting process because Digi-Key has two levels of vendors. They have a formal, large vendor path which is really complex. About a year ago they started a Marketplace which has a streamlined entry for smaller suppliers like us. The paperwork to become a supplier through the main channel is like a two-year process. But on the Marketplace-side, I think Barbara stood us up in about a month. It was pretty streamlined.

I want to give a shout-out to Digi-Key. They are a spectacular company for us to work with. They’ve got something like 4000 employees; it’s a $3B a year company. But it acts and feels like a small, nimble, responsive company. They have really figured out how to do this well.

GUIDO: They’re a great company. Whenever I do any prototyping, Digi-Key is my first source.

CHRIS: That’s their claim to fame, right? That’s the difference between Digi-Key and Arrow, for example. If you want to pay the postage, they will sell you one of anything. When you are prototyping, they have everything you need. Boom. Go to them to get one of this and one of that.

Have your reached out or worked with Adafruit or Sparkfun? We have not done that yet.

GUIDO: Sparkfun has an interesting model with a bunch of different ways they were handling it. I reached out to them early on. It never ended up panning out. I had distribution with Microcenter, Elector in Europe for a while. Elector was fantastic by the way. They remind me a lot of Digi-Key. Especially for hobbyists. They were great too. Those were my main channels early on.

CHRIS: We’ve seen a proliferation of companies doing that kind of thing. It really comes down to who is a good fit with what you are doing and whether they have an interest in it. I’m just curious, have you ever worked with Pimoroni in the UK?

GUIDO: I have not. I haven’t reached out into those avenues just yet.

I’ve spent the last two, maybe three years, really focusing on understanding how to do digital marketing. Right now my strategy is to focus exclusively on digital marketing.

CHRIS: We have learned a tremendous amount from you about digital marketing! That is its own entire world. Let’s talk about that for a second. You’re an engineer. I’m an engineer. We approach things from the problem-solving side.

Something you said to me as we were prepping for this show is that “The most important thing to start with is not the product, but the market research.” Talk to us about that. What have you learned over the years and what would you share?

GUIDO: That is something that is near and dear to my heart. I’m an inventor through and through. I should have a shirt that says, “There must be a better way.”

So, I fell victim to what I think a lot of inventors and entrepreneurs fall victim to, which is “I have this great idea. I’m just going to go build it.” Because if you build it, they will come, right?

The answer is “No. No they will not.”

That was a very hard lesson to learn. I may or may not have had to learn that a few times.

After a while I began to realize that whenever you have an idea, it is great to have the idea. But now you have to put in the market research to find out is anybody actually going to buy it.

What I had found was, I would come up with this “great idea,” or what I thought was a great idea. You can spend eight to nine months developing it and getting your minimum viable product up and out. Then you attempt to bring it to market, and nobody wants it. Nine months is a long time to devote to something when in the end nothing comes of it. It’s shattering.

I would caution anybody who has an idea to bring anything to market. As soon as you have the idea: Market research first. Prototype second. That’s super important. Maybe not the most fun, but important. Because I get it. As engineers, we want to make stuff. But…I will never make that mistake again.

CHRIS: I can’t second that strongly enough. It’s difficult because I think most engineers are introverts by nature. This is about engaging people repeatedly, and mostly people you don’t know, and asking them very honestly “How does this appeal to you? How would you use it?”

You have to be imaginative about how you ask the questions. So, you are absolutely right.

What we have found is, that if you just describe something to someone in words, they have a hard time visualizing it. It does help to have a drawing or even a crude prototype to illustrate the core concept, so you can show it to somebody and say “Do you get this? How would you use it?”

You’re really driving to “Will you ultimately pay me for this?” And is what they are willing to pay more than what it costs to make it. If those things aren’t true, don’t do it.

It’s been tough for us. We’ve done something that seems to be unique. Once people see it, they get it. But the trick is getting them to see it. That’s why the Maker Faires were such a great venue. You’ve got a couple thousand people a day walking past your booth who are interested in the kinds of things you are doing. They see it and they either get it or they don’t. But at least you are in front of them. We found it tough to replace that face-to-face interaction with online activities.

Resources Chris recommends for Market Research:

The Right It, by Alberto Savoia   —  How to determine if there really is a market for your product before going whole-hog into production.

Jump Start Your Marketing Brain, by Doug Hall   and   Jump Start Your Business Brain, by Doug Hall   — Chris says these are both “Excellent strategy and tactics for effective marketing.  Why things work and why they don’t.”

Phase Dock is an Amazon affiliate.

 

END Part One.  See Part Two for these topics:

  • STEM education and mentoring
  • The  problem/s solved by Dr.Duino and Phase Dock products
  • Entrepreneurship and the “wearing of many, many hats”
  • The importance of support and the value of feedback
  • Tools and the tech stack for e-commerce
  • Thoughts on product development and SKU management
  • Pricing and product quality