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 Two (this post), the founders talk about:
- 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
- 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
GUIDO: I’ve been teaching a STEM course from my house since about 2013.
My new neighbors had some kids who were interested in electronics, so I started teaching them when they were about 14 years old. Two of the three are now going to school for engineering which is awesome. The other one is going for digital marketing.
Now they have their own business which they literally just formed. It is great to see them taking the steps to start this product. We’ve been doing the market research first and the build second for their first product launch.
CHRIS: That’s quite an achievement. If I remember, one of the first things you used our product for was mentoring. You do a lot of mentoring, don’t you? How do you approach that?
GUIDO: It all started because of my dogs. One of my dogs bit my neighbor when we moved into my new home. I remember I ran back to his house with a bottle of wine, thinking, “Here. Please don’t sue me.” We became really good friends over that. He’s the one who has the son who is really interested in electronics stuff, and his cousin and one of the neighbors down the street. It was very much a weird happenstance. Not only has it been a great teaching experience, but a great learning experience.
CHRIS: We know that one of our three submarkets is STEM education, so we’ve been focusing really hard on it. In fact, we are collaborating with a local educational start-up to develop a self-guided electronics course that would let students go through at their own pace. They will go from viewing things on a monitor, to interacting with computer simulations, to hands-on building of electronic projects. We’re pretty excited about that. I’ll keep you dialed into it.
That is one of the beauties of the Maker community in general. There is so much emphasis on teaching the next generation and bringing young people into the field. I love that generosity of spirit.
GUIDO: It’s a lot of joy. Honestly, it something that I plan to do until the day I die.
CHRIS: Your product is perfect for that. It’s a great teaching tool.
GUIDO: It is. If anybody recalls, the first Dr.Duino, the red shield, wasn’t really meant for people just getting started.
But I ended up having many new customers latching onto it because it was an interesting way to learn without having to worry about the breadboard. So yeah, I ended up using it to teach my kids how to get started.
When you are first starting out in electronics…and even though Arduino is really easy, very simplistic…you still have the two core components that you’re always fighting with. You have the hardware which includes breadboards and everything else. And you have the coding issues.
When one of them goes wrong it appears a lot of times as though it is both. It can hard to figure out which one is actually wrong. Dr.Duino is a great product from that vantage point because it helps isolate the problem and makes it easier for the student to grasp concepts faster.
CHRIS: Exactly. When you have two big buckets, how do you separate out where the problem is. That is one of the thoughts we had behind the Phase Dock WorkBench. Not that it is just faster to put things together, but when you transport your project it can get ugly in a hurry. We wanted to solve that problem.
I’ve told this story on Andre a number of times. He’s really why our company got started. He lives just down the street, and he has a beautiful studio. I’d been there a couple of times and there were two big projects on his desk. They were pretty complicated. I said “Hey man. Are you working on these?” “Oh yeah.” “Can you move them out of the way?” “Oh no. Because something is going to break if I do.”
I said, “You know what? I’ll bet we can solve that problem.”
So that whole notion of helping to identify where the problem is… and minimizing the problems at the interface between components…that helps students a lot.
GUIDO: Yes. Working on one thing at a time. That’s something I’ve tried to do throughout life; Try to hyper-focus on one thing at a time. And build on top of each building block.
CHRIS: That’s just a good, basic engineering principle. When you have a big, ugly problem you’ve got to break it down into manageable chunks and just do one at a time. If you try to do all of the issues at once it is guaranteed flame-out.
That’s a great business principle as well. I’ve actually used it to try to help me manage my time better. Humans are not really meant to multi-task. Focusing on one thing at a time just on a daily basis is important. It’s easy to get split up into many different directions.
GUIDO: 100%! As your business is growing, you have to wear 1500 different hats. Recently, once I get one of those hats working to the point where it is in a “good enough” state, I try to bring others on board to replace me. And not just replace me, but be better than me at doing something. That’s been a core principle of mine for a while.
CHRIS: One of my favorite entrepreneurial books is The EMyth by Michael E. Gerber.
One of the key ideas in it is this notion that every entrepreneur has to wear three hats. So, you’ve got The Technician, which we’re all familiar with. That’s the one who builds things. You’ve got The Manager. That’s the accountant and operations person. But then you have The Storyteller, who is the entrepreneur who has the vision and can communicate it to customers and collaborators.
Gerber does a great job of saying “You really need to wear all three hats and you need to wear them in approximately the same proportion.” If they get out of balance, your business is not going to fly.
I love that book. I’ve probably read it three times. It is not very long so I highly recommend it to anybody who’s thinking about taking the plunge here.
Circling back to the arc of our conversation. I think your market research before, during and continuously is probably the most important.
GUIDO: What you just said is really important. Continuous market research. Your ideal customer is constantly changing over time. That is something that you have to pivot and continually face; you’ll never be done.
CHRIS: The field that we play in, boy, talk about rapid evolution. There are new, destabilizing developments all the time. So, you’ve got to be agile and watch those and respond to them, and then yes, your customers are always changing.
I will give credit to Barbara. She does a spectacular job of reaching out to our customers, engaging them, and asking them “How are you using the product?” We try to listen really hard to our customers.
GUIDO: That’s super important. If there is one other golden nugget in the launching of any product, regardless of what the product is, is calling your customer post sale. And listening to what they think and their concerns. That has been invaluable.
As the inventor, you get really close to your product. Maybe even attached to it. It’s important to call customers and see it through fresh through their eyes. I’ve learned an incredible amount from my customers when they say, “Why does this work like this?” and I go “Oh. Yeah. You are right. That doesn’t make a lot of sense.” That’s an incredibly valid point.
CHRIS: It’s time consuming. But I don’t think you can succeed if you don’t listen to customers. I think what we’ve said is “The most important thing is communication.” It’s not really technical skill, it’s communication.
BARBARA: Neither of you have talked about your partners, your collaborators, your suppliers. Tell us a bit about these relationships and the tools that you use.
GUIDO: That’s an incredibly important question and a great one. The software stack that I use to do the advertising and shipping and the backend…all of those things have to play together incredibly well. You need a CRM (contact relationship management) tool. You need a great shipping partner. The marketing piece. There are just so many things. I’ve gone through everything from a Shopify store, to Wix, a bunch of different platforms to handle that. It’s a continually evolving thing. There’s just so much.
CHRIS: I can see some businesses that don’t need a CRM to manage their contacts, but not many. We use Hubspot. It has a free tier. Even at the free tier, Hubspot has been extremely useful.
We were in a business accelerator course this summer. We asked around and nobody came up with a better, stronger CRM solution at this price. But, like you, we’ve gone through a couple of iterations on the website platforms. We’re currently on WordPress; using WooCommerce. We moved away from Squarespace. For the most part, WordPress has been an improvement. The biggest thing is that all those moving parts need to work together. That takes a tremendous amount of time.
I would caution anybody who is thinking about this. Not only do you have to develop the product and market it. But you also have to learn and manage the technology of putting up a website with ecommerce. That’s a non-trivial task.
GUIDO: It is. In a large company, these kinds of tasks are entire departments. When you are doing this on your own, it’s just you doing everything.
When you are picking your tools, it is important to pick ones that are highly supported. At one point I used to use Active Campaign to handle my emails and stuff, but that didn’t integrate well with some of my other software. Although, far and away they have the greatest email capturing and monitoring system that I have ever used. But again, it didn’t play nice with some of the other software I was using.
You have to be careful of your tech stack, because that can own you. It can prevent you from making more products, because you are stuck dealing with your tech stack. It’s something that you have to be really mindful of.
CHRIS: I can’t agree more. One thing that has frustrated and disappointed me is, that it has been difficult for us to find good support people, who are both affordable and technically competent. This technology is not trivial. We’d like to outsource some of this aspect of the technology but have not succeeded. That’s a note of caution there.
GUIDO. Another thing we talked about in the preshow call is Tech Support and Customer Support. I was doing it all on my own. But as the numbers grew, I couldn’t keep up. This person who is going to interact with customers is the most critical role that you can hire for. They are the face of your company. I’ve been incredibly lucky to find two people.
One is Dawn. She is fantastic at handling customer support issues. Because they are going to come up. No business is perfect. It doesn’t matter whether you are Apple or any other company you’re going to have issues with shipments or other things. It’s a matter of how you react in the face of it.
I also recently hired another person to handle the technical support. That enables me to continue creating more product and reaching out to a larger community. His name is John and he’s fantastic. That’s another key element.
CHRIS: That’s key. It’s not that something went wrong, but what you do in response that is important.
BARBARA: Another question. Guido, I heard you say that you were hiring so you can create new and additional product. How are you handling the proliferation of SKUs? Is it better to be a one product company, like you were early on? Or better to have multiple things to sell?
GUIDO: You know, that’s still a question I go back and forth on. A lot actually.
I think it is important to have a continual evolution of products so you have new stuff to bring to your customers. Especially during the pandemic. Being able to give my customers something to do while we were all trapped inside has been important.
So my mission going forward is to create new projects and new things for people to build and to tinker with.
But SKU management…I think you guys have way more SKUs than I currently do…it’s tough. You have to be picky about what you are going to bring to market. Because when you bring it, you have to support it. There is no going back on it.
CHRIS: Something we found…for you this is less important…we came up with a product that has some visual appeal. The first thing we thought is that people are going to want a range of different colors. We tried ten different colors and ultimately found only a few of them sold. It just didn’t matter that much, so we pulled back hard on the different colors.
Now honestly it seems like the favorite color is matte black. So we reduced SKUs by eliminating many of the colors. We’re trying to support a big universe of boards (PCBs) so it’s easy for our SKU inventory to kind of explode. We constantly have to ask ourselves “Is this a good thing to add?”
The other thing that we have talked about, but I think would be more difficult for you, is to open source some of our items and let people 3D print their own. Of course, with an electronics product that’s not going to work.
What has held us back is just what you’ve said before, that you have to support it. If we put stuff out on Thingiverse, we can’t afford to have people calling us to ask “Hey, why won’t this print?”
BARBARA: Steve wants to know how you like working in a space where hobbyists are notoriously “cheap.”
GUIDO: I can tell you is that it’s not just this market. If you want to go buy a cheap “whatever”, you can always find something that is super cheap, but it will break.
In this space especially, there are tons of Arduino products that are cheaper, but the breadboards break, or the wires break or it comes with code, but the code isn’t documented, so now you’ve traded “cheap” for “time.”
I tend to spend a bit more because I want the quality and the product support. That something I actually put first. Whenever you become a Dr.Duino customer, the first thing that you see when you log into Dr.Duino’s Lab…that where to find all of my manuals, the code and everything…the first thing you see is “How to get support.”
I think a lot of companies put that last because they don’t really want the call. But when you buy a more expensive, quality product it comes with support. You expect it. When people buy cheap for so long they realize that it’s not working.
CHRIS: I’m glad you said that. You can trade money for time. That is a choice. I think sometimes what I see is that people tend to undervalue their own time, and they also under-estimate how much time they are spending cleaning up a missing or broken component on something they bought.
For some people that is part of the joy. We’ve had people tell us “Hey, I LIKE making my own plywood board to screw an Arduino to.” I’m like “God bless you. If you enjoy that, I’m not trying to steal your joy.”
But if that is not what you want…if you want to get to the happy part of wiring stuff up and the blinky lights come on, then come talk to me.
I think you are right, it’s a choice. It may be important to help people become conscious of the trade-offs of that choice.
BARBARA: You stirred up a bunch of comments now. Steve says, “You can go broke ‘saving money.’”
CHRIS: That’s the truth.
GUIDO: Very interesting, I like that.
BARBARA: Andrew commented: “Once you saturate your market, you’re done. It’s nice to have “beginner” to “expert” stuff so that your customers have something to come back for.”
CHRIS: That’s a really good point. Guido, has that driven your design philosophy between versions two and three?
BARBARA: Andrew also wants to know, “How many more products are you working on?”
GUIDO: Infinite. I have what is called my “creation cave,” which is my basement. I have a table that is just full of project ideas that I’m just tinkering with. It’s an infinite supply.
To answer Chris’ question…has it driven my product design? 1000%. Like I said earlier, my initial version of the Dr.Duino was the red shield which was more geared to people who actually wanted to measure stuff with their DMM and probes.
When I realized that new people were latching onto this, I’m forever grateful, but it’s not the best for them. When I launched the new products last May, that is why I wanted a dedicated beginner product which is my Dr.Duino Pioneer Edition. It is meant for people who are just getting started. You have to solder. That kind of comes with the territory. It’s an easy and fun build. I stress “fun,” because I went through a lot of effort to make sure the directions are written in a fun way.
For more intermediate to advanced customers, there is my Dr.Duino Explorer Edition. It offers a lot of the same functionality that my previous generation did. It allows you to break out and get your probes on it. It has all the same components as the Pioneer does, but it gives you a lot more depth and breadth of what you can do. It has a built-in voltage regulator, BLE for both Apple and Android,
So yes, it very heavily drove my decisions in those two product lines.
CHRIS: When we first laid out the roadmap for our product, we thought, “Yes, this is for desktop prototyping”, and it is.
But my goal was always to give someone a kind of up-armored way to move from desktop to field deployment in a more hazardous environment. That’s been the way we approached that concept. Some of our customers have actually done exactly that. Especially now that we’re seeing more commercial/industrial customers. In fact, our April Phase Dock LIVE will be with Steve Friedl. He’s an example of moving from prototype to deployment, so “Yes,” to that question. I think both of us are really conscious of that.
When you look at your customer base, you’ve got everything from complete newbies to really advanced engineers. It’s kind of fun to be able to sell a product to people at both ends of the spectrum, you know.
GUIDO: It is.
CHRIS: Well, we’re at an hour right now. I’m sorry about the video not working, however, of all the LIVE events we’ve done so far, this one probably worked the best as a podcast.
Guido, it was just a whole lot of fun. Thank you for joining us.
GUIDO: Yup. Me too. Thanks for inviting me. I appreciate everyone asking questions too.
CHRIS: See you all in a month. We’ll be interviewing our good friend Steve Friedl on April 10. Boy howdy, we’ll make sure we’ve got video for that one. There will be a lot of show-and-tell. Thank you to everyone for sticking with us through the technical difficulties. Guido, thank you! We’ll see you next time.