4 ms·

Author here! I didn't expect to see this pop up on HN. I'm happy to take any feedback or answer any questions about this post.

cushychicken 5y ago
Hardware engineer here who has spent a good chunk of his career building embedded Linux machines. I see two options vis a vis near term profitability: 1) charging more, or 2) designing some custom hardware. I would imagine the first route is the way to go. The second opens your business up to a shedload of risk by directly exposing you to the chip market (here be dragons - now more than ever). However, at some point, it will likely start to make sense to design your own custom hardware - especially as you add PoE to this. That might be a sensible point to step away from open sourcing the software as well. It's an opportunity to port to a new chipset (Broadcom is a nightmare to work with for anyone who's not at a BigCo), make a clean break with your old codebase, and maybe add some saucy new features. I would estimate the volume at which this makes economic sense for you on a unit basis is around 10k units. You will likely need to lever up some bucks to cover that production cost, but I conservatively estimate that could trim $10 out of your bill of materials cost. Two bits from an almost purely hardware engineer's perspective. (With <3 from Eastern Massachusetts.)
- mtlynch 5y ago
  Thanks for reading! Yeah, custom hardware is something I want to do more of, but I have a hard time with it since I'm not much of a hardware guy, so I stick to the Pi. It's a pain in some ways, but it has the big benefit of a large user base so there's a lot of support. I've been working on the custom PoE HAT for a few months, and the last two months has just been running in circles trying to find ICs in stock. The EE consultants I'm working with say this this would normally be something we could build easily for $20/unit, but with the chip shortage, everything's out of stock. I've even okayed them to look for parts that would drive it up to $50/unit just for the HAT, but we're still not finding anything. My plan is to do the custom hardware in baby steps, like start with the custom PoE HAT, then see if I can integrate the TC358743 into my HAT for HDMI capture, then maybe move to Pi CM4, then maybe something even more custom.
  - cushychicken 5y ago
    That seems like a sensible design progression - it lets you slowly chip away at the parts you don't need. The IC shortage is driving everyone in hardware bonkers at the moment, myself included. I wish I had better input for you here, except that we're in it together for at least the next six to twelve months!
  - jpm_sd 5y ago
    Also an eastern MA EE here - shortages now are the worst I've ever seen (20 years into my career). It's a brutal time to be introducing a new product. I'm having to spin new board revs just to use whatever chips I can currently scrounge from brokers. Suppliers are telling me they can see the light at the end of the tunnel, but it's looking like mid/late 2022.
mikewarot 5y ago
Paid support seems to be a good way to go, you could always pay a few people to be on call, and charge for that service. Hardware that just works is worth more. Charge $100 more for unit 1 orders, then discount down to the current price in quantity.
lxe 5y ago
A great inspiration to someone dabbling in launching a "lean" hardware business. How is $15,637.68 in raw materials calculated -- assuming $300 unit price and you sell 100 units? The rPI is $40-80, and the capture card is $35? The case and fan is probably $10 at the most?
- mtlynch 5y ago
  I share my costs in a previous post: https://mtlynch.io/retrospectives/2020/12/#voyager-pricing https://mtlynch.io/retrospectives/2020/12/#voyager-pricing My costs are a little higher because everyone's sold out of 2 GB Pis, so I've had to upgrade to the 4 GB, which costs $20 more. The big costs are the Pi boards, the HDMI capture chips, and the case. It also requires a lot of cables and a custom PCB, but I'm trying to reduce those in the next version.
xupybd 5y ago
If you're looking for market opportunities try the manufacturing industry. We have loads of CNC machines running very old Windows operating systems. Not only that, we also need support from the manufacturers. Often remote support from overseas. I currently secure this by unplugging the network when they are done. Exposing a windows 98 machine to the internet is scary. When that machine is a critical production machine it's terrifying. We have 100k in spare parts to keep it running and spare hard drives with images ready to go. So we pay for reliability. Your KVM would mean we don't have to connect these to the internet but still get remote support. For $300 that's a no brainer. Also, we drill holes in wood, our value add is low. 50% margins would kill us. You may want to look at increasing your cost.
- mtlynch 5y ago
  >If you're looking for market opportunities try the manufacturing industry. We have loads of CNC machines running very old Windows operating systems. Not only that, we also need support from the manufacturers. Often remote support from overseas. Oh, that's a good idea. That wasn't on my radar at all. I live in an area near a lot of manufacturing, so I'll reach out to them. Thanks!

cushychicken 5y ago

Hardware engineer here who has spent a good chunk of his career building embedded Linux machines. I see two options vis a vis near term profitability: 1) charging more, or 2) designing some custom hardware. I would imagine the first route is the way to go. The second opens your business up to a shedload of risk by directly exposing you to the chip market (here be dragons - now more than ever). However, at some point, it will likely start to make sense to design your own custom hardware - especially as you add PoE to this. That might be a sensible point to step away from open sourcing the software as well. It's an opportunity to port to a new chipset (Broadcom is a nightmare to work with for anyone who's not at a BigCo), make a clean break with your old codebase, and maybe add some saucy new features. I would estimate the volume at which this makes economic sense for you on a unit basis is around 10k units. You will likely need to lever up some bucks to cover that production cost, but I conservatively estimate that could trim $10 out of your bill of materials cost. Two bits from an almost purely hardware engineer's perspective. (With <3 from Eastern Massachusetts.)

mtlynch 5y ago
Thanks for reading! Yeah, custom hardware is something I want to do more of, but I have a hard time with it since I'm not much of a hardware guy, so I stick to the Pi. It's a pain in some ways, but it has the big benefit of a large user base so there's a lot of support. I've been working on the custom PoE HAT for a few months, and the last two months has just been running in circles trying to find ICs in stock. The EE consultants I'm working with say this this would normally be something we could build easily for $20/unit, but with the chip shortage, everything's out of stock. I've even okayed them to look for parts that would drive it up to $50/unit just for the HAT, but we're still not finding anything. My plan is to do the custom hardware in baby steps, like start with the custom PoE HAT, then see if I can integrate the TC358743 into my HAT for HDMI capture, then maybe move to Pi CM4, then maybe something even more custom.
- cushychicken 5y ago
  That seems like a sensible design progression - it lets you slowly chip away at the parts you don't need. The IC shortage is driving everyone in hardware bonkers at the moment, myself included. I wish I had better input for you here, except that we're in it together for at least the next six to twelve months!
- jpm_sd 5y ago
  Also an eastern MA EE here - shortages now are the worst I've ever seen (20 years into my career). It's a brutal time to be introducing a new product. I'm having to spin new board revs just to use whatever chips I can currently scrounge from brokers. Suppliers are telling me they can see the light at the end of the tunnel, but it's looking like mid/late 2022.

mikewarot 5y ago

Paid support seems to be a good way to go, you could always pay a few people to be on call, and charge for that service. Hardware that just works is worth more. Charge $100 more for unit 1 orders, then discount down to the current price in quantity.

lxe 5y ago

A great inspiration to someone dabbling in launching a "lean" hardware business. How is $15,637.68 in raw materials calculated -- assuming $300 unit price and you sell 100 units? The rPI is $40-80, and the capture card is $35? The case and fan is probably $10 at the most?

mtlynch 5y ago
I share my costs in a previous post: https://mtlynch.io/retrospectives/2020/12/#voyager-pricing https://mtlynch.io/retrospectives/2020/12/#voyager-pricing My costs are a little higher because everyone's sold out of 2 GB Pis, so I've had to upgrade to the 4 GB, which costs $20 more. The big costs are the Pi boards, the HDMI capture chips, and the case. It also requires a lot of cables and a custom PCB, but I'm trying to reduce those in the next version.

xupybd 5y ago

If you're looking for market opportunities try the manufacturing industry. We have loads of CNC machines running very old Windows operating systems. Not only that, we also need support from the manufacturers. Often remote support from overseas. I currently secure this by unplugging the network when they are done. Exposing a windows 98 machine to the internet is scary. When that machine is a critical production machine it's terrifying. We have 100k in spare parts to keep it running and spare hard drives with images ready to go. So we pay for reliability. Your KVM would mean we don't have to connect these to the internet but still get remote support. For $300 that's a no brainer. Also, we drill holes in wood, our value add is low. 50% margins would kill us. You may want to look at increasing your cost.

mtlynch 5y ago
>If you're looking for market opportunities try the manufacturing industry. We have loads of CNC machines running very old Windows operating systems. Not only that, we also need support from the manufacturers. Often remote support from overseas. Oh, that's a good idea. That wasn't on my radar at all. I live in an area near a lot of manufacturing, so I'll reach out to them. Thanks!