Crowd fund it or not? - Page 1
Forum section: electronics / general

author: robertferanec
author_rank: Regular Contributor
timestamp: April 18, 2016, 12:37:55 pm
content: The problem is ... I am not sure if it would be a good idea to Crowd fund our open source project calledOpenRexor not.From our survey (500 people), around 60% would like to buy the board for a price below $50 USD, 30% would buy the board up to $100 USD and 10% would pay more than $100 USD. To build the board below $50 is unrealistic. To build and sell the board below $100 could be realistic for a specific configuration if there is enough orders, but that would require a lot of money (e.g. 1000 pcs = $100 000 USD ).I do not want to make a profit from selling the boards (we do not sell boards, we have enough income from our other activities), but because there is a lot of people who like the board, I would like to give them opportunity to buy it.- If I go for Crowd funded project, we may get the money to build 1000 boards (and get better manufacturing price), so a lot of people could buy the board for a good price, but ... it is a quite high risk for me (e.g. if anything goes wrong, it can cost me a fortune)- If I don't go for Crowd fund, we may be able to start selling the boards in small quantities, but for a high price.What would you do?

author: EEVblog
author_rank: Unknown
timestamp: April 18, 2016, 12:46:12 pm
content: I'd go for the higher price.Forget the survey, people have money, if they want it they will pay.Some maybe helpful info:https://www.eevblog.com/2014/05/28/the-economics-of-selling-your-hardware-project/

author: robertferanec
author_rank: Regular Contributor
timestamp: April 18, 2016, 01:06:44 pm
content: Thank you Dave. That is a very good article.Your numbers are actually very similar to the numbers I have learned. Especially if I would like to do everything professionally (support, documentation, future development and improvements, ...), the margin must be healthy. Otherwise it doesn't make sense to do it.What I am worried about is, that a lot of people do not see the real cost hidden behind manufacturing and selling the boards. They only see and read all about the $10 computers. So, I am not really sure how they will be looking and reacting at a board which is designed for playing and learning, but it costs $249 or $299 USD.

author: Kean
author_rank: Unknown
timestamp: April 18, 2016, 01:17:35 pm
content: My take - Yep, have a go but stick to a higher price to allow margin for any issues. I'd probably back it myself, and for more than one board.Use a more reputable platform like Kickstarter or Crowd Supply - if it doesn't fund, you've not lost much except a little time creating content and answering questions. And it could still be good advertising for your business.If you are successful in funding, you can also use something like BackerKit (or your own webstore) for add-on purchases, possibly sold close to your cost price, but if bought in bulk can give you additional revenue. You already have to coordinate shipping, so having a few add-ons doesn't complicate things too much.Out of interest, what are the main concerns you have? You've got a tried and tested design, have experience writing content and creating videos, you have an existing good reputation and followers, etc. You just need to get the pricing right, and that primarily just means being realistic.I actually have stock of parts sitting around for about 500 imx.233 based Linux boards, but not sure if it is worth doing a campaign to fund assembling them - that's a significant part of the cost above the parts themselves. Obviously doing it would be a distraction from my main business, but also I dread the hassle of coordinating shipping, and the commitment of maintaining ongoing support channels. Of course the parts are losing value every day as well...

author: robertferanec
author_rank: Regular Contributor
timestamp: April 18, 2016, 01:51:49 pm
content: Quote from: Kean on April 18, 2016, 01:17:35 pmMy main concern is, how we can get enough people to buy enough boards for the right price so we can grow the project much further. I believe the board and the whole project is really nice and very good for learning (I really like this board, I played with it a lot, probably the most from all the boards I have ever designed). I just want to make it right, so also other people can get the chance to get their own boards.PS: @Kean thank you. It's very nice to hear you would back the project by yourself.

author: zapta
author_rank: Super Contributor
timestamp: April 18, 2016, 04:44:02 pm
content: Quote from: robertferanec on April 18, 2016, 12:37:55 pmHave you considered talking with Chinese vendors such as Seeeds and let them handle the manufacturing sales and fulfilment? If you don't care about profit, just about making them available, than cloning should not be an issue.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 18, 2016, 05:59:07 pm
content: Quote from: zapta on April 18, 2016, 04:44:02 pmThis is hard to answer. I guess, because the board is open source, sooner or later someone will clone it (especially if they see they can sell them). So, it may look like a really good idea. However, we have developed OpenRex to be an educational platform. For this, we may need some money to develop more things around the board and even we don't want to have a profit from it, we may need to sell the boards with some margin so we can re-invest it back to the OpenRex environment development. Unless, there would be enough people willing to help to develop the examples, software, documentation, .... in their own time.So, yes, I was thinking about someone else taking over the full production (we do have a company what is manufacturing and selling our boards), but I am not sure if moving it completely away from us would be a good idea as it would not support development around the board (but I do not know Seeeds and how exactly they work, so I am not sure if that is what you meant)

author: Kilrah
author_rank: Unknown
timestamp: April 18, 2016, 07:04:46 pm
content: Basically they mass-produce based on your design and send you some amount for each unit sold. That can very well support the environment if the sales are there.

author: ez24
author_rank: Super Contributor
timestamp: April 18, 2016, 07:08:15 pm
content: Quote from: robertferanec on April 18, 2016, 01:06:44 pmSeems you should not want to sell to these people, they will cost you in the end.

author: edavid
author_rank: Super Contributor
timestamp: April 18, 2016, 11:03:05 pm
content: I wonder if you are able to explain to the potential funders why this is a better board for learning than existing ARM boards like the Raspberry Pi, BeagleBone Black, etc.If you can't do a good job of that, you can't really expect people to pay more and wait longer.No one cares about your costs, only the value that they are getting.

author: Bud
author_rank: Super Contributor
timestamp: April 18, 2016, 11:20:04 pm
content: +1. So far i am left with figuring out on my own what is it that would make me buy a Rex board.

author: Kean
author_rank: Unknown
timestamp: April 18, 2016, 11:37:57 pm
content: Quote from: Bud on April 18, 2016, 11:20:04 pmDid you look at the website?It is completely a open design, apart maybe from the fact it was designed in Altium.Plus there is heaps of blog articles (plus a paid training course) on how the design was done.Maybe you aren't the target market, or maybe you need to wait for them to actually put up a campaign...

author: Bud
author_rank: Super Contributor
timestamp: April 19, 2016, 12:20:58 am
content: Yes i did. Heaps of articles? Thank you very much. Exactly what i said- left me with figuring out what is that which would make me wanting a board. There is no quick anything that would grab my interest. Do not assume everyone know as much as the author. Say it!

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 04:31:45 am
content: Quote from: edavid on April 18, 2016, 11:03:05 pmI am notIf you have a look at the other companies, they have teams of people for PR and Marketing. And, it's only 2 of us. OpenRex is not even our main project. I wanted to work on something what we would enjoy designing and what would be dedicated only for people to play with. Something what I could handle to my son, he could start playing with a microcontroller, LEDs, buttons, motors, sensors, ... and when he is ready or need something more powerful he would move up to the CPU and Linux. No installation.There are plenty of boards and plenty of software, but it is actually not very easy to learn program. When I was learning (on ATARI), it was easy. I had one book and I wrote the instructions and that was it. Now, you have to install a huge software first, configure it and when you create a new project it already has tons of code inserted. I have to sit down with my son and explain him what things mean, it's hard for people who are starting ... to actually start.I love Arudino. Arduino is great to start with, but Arduino is very simple. Too simple for todays world. There are much more powerful things which you can work with. Some time ago I bought Raspberry Pi and I was very surprised, that it is actually not so simple to start with it.And what I hate most are the software guys who don't want to share their know how. It's so frustrating. Most of the programming stuff is very simple if you know how to do it - but no one wants to tell these simple things, they keep it for themselves. If you ask a software guy, he will tell something like: "It's simple, just write there this ... google it ... follow the manual ...", but they never tell you the exact steps and you have to spent hours and days trying to find the one command line which will do it.That's may plan about OpenRex - to teach how to design quite complex hardware, to teach how to write firmware for microcontrollers and to teach how to do Bootloader & Linux stuff for ARM boards. All in one place.Unfortunately, I am not a marketing guy (I am an engineer) and we do not have team of people creating nice videos and blogging / tweaking / facebooking, so I may not be able to explain people why OpenRex is better than the other boardsGuys, please help, what the project would need to have, so you would pay $300 USD to play with it?

author: Kean
author_rank: Unknown
timestamp: April 19, 2016, 04:49:09 am
content: I think US$300 would significantly limit the sales. You'd definitely need to get it below US$200 to be at all successful.Just compare with something like the UDOO Neo board which somewhat similar and are under US$100.Seeed Studio are pretty good to deal with, they've built and sold one of my designs.Alternatively have you considered teaming up with someone in Europe that also does open hardware - like Olimex or MikroElectronika?These guys all have the in-house assembly, marketing, distribution channels, etc, all in place, and will be able to give you a better idea of build cost.

author: ez24
author_rank: Super Contributor
timestamp: April 19, 2016, 04:56:05 am
content: QuoteA set of instructions, tools (IDE, compiler, debugger), and experiments to make it easy as you say you wish to do. I do not think 2 guys could do this however.Just too much to do. But I hope you do succeed.Maybe you could follow Arduino examples, experiment for experiment and compare the code and MCUsActually include an Arduino with your kit. Someone could learn both at the same time. So they could get a motor running first under Arduino and then get it running with C on another processor.I am sure there is so much public domain stuff on the Arduino that you could just copy the instructions and write instructions for your processor. I would love to buy something like this.I agree there is a big gap between the Arduino and other companies learning kits. You may have found a market.Just remember most members here are advance and therefore not suitable for your product, so do not get discouraged by the answers. If you do not get an answer then ask the question in another way.So I think there might be a market for an Arduino/Cortex M learning kit.And since you recognize the problem of difficulty, you may have a chance at this. Good luck

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 06:13:54 am
content: Quote from: blueskull on April 19, 2016, 04:56:14 amThank you very much @blueskull. It is very encouraging.Quote from: ez24 on April 19, 2016, 04:56:05 amThank you @ez24. That is exactly why we included both: NXP Microcontroller & CPU on OpenRex. We already have a list of almost 100 examples which could be done with OpenRex (from simple to advanced ones, including similar examples as used with Arduino).Quote from: Kean on April 19, 2016, 04:49:09 am- $300 looks a lot, but the BOM really is expensive (have a look at the BOM). If the board is manufactured in 10k, the BOM still will be between 60 - 100 USD (depends on configuration) + assembly (30 USD) + PCB (6 USD). So, realistically if we include @EEVblog suggestion, we are speaking about $199 - $299 final price, which will be tough when board is manufactured in smaller quantities.- Does Seeed pay everything (including components) by themselves and they just send you agreed profit or you have to pay them something before they start manufacturing?- I am open to teaming up with people who like the project and would like to help

author: alexanderbrevig
author_rank: Frequent Contributor
timestamp: April 19, 2016, 06:41:40 am
content: Maybe a bundle at ~ with both the course and the Rex?BTW, that's the most beautiful schematic I've seen in my life. What a piece of utter excellence!

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 06:51:30 am
content: Quote from: alexanderbrevig on April 19, 2016, 06:41:40 am- Yes, maybe a bundle could be one of the options how to do it.- Thank you @alexanderbrevig. Martin did fantastic job on the schematic and layout.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 07:26:37 am
content: Quote from: blueskull on April 19, 2016, 06:50:58 amThank you @blueskull. We did try some of the things and we were able to get BOM price close to $100, so your estimation is correct. The reason behind some of the components is, because they are NXP / Freescale (CPU, MCU, Audio, Gyro, Accelerometer, Power, CAN, ... ). If you have a look at the BOM, you may notice, that 35% BOM price is NXP and I was naive to think, that could help to catch NXP attention and maybe get some support from them. I was wrong. Most people from NXP are just after sales and only what they care about is how many components you buy from them. They are not really interested to support projects (but there are couple of fantastic and supportive people).If we sell only bare boards, maybe the $150 could be realistic, but:- The board is still expensive, so we still may need to find a way how to differentiate the board from the other cheap boards.- The board needs to have a good margin to create the examples and community around it.- The type of sales will be mostly 1-10 board per 1 customers. This means a lot of support - must be covered in the board price.- There is still the problem how to start. We will not be able to sell the first boards for that price and to manufacture 1k in the first run. It is too risky and too expensive. That is actually the reason why I started this topic.One of the frustration of people who buy the cheap boards is poor support, documentation, software .... that's the cost of cheap boards. To make it right, the boards can not be sold for a little bit more than manufacturing cost. That is what I feel about it.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 07:50:32 am
content: Quote from: blueskull on April 19, 2016, 07:35:11 am- Yes, I agree, this could be one of the groups who could be interested to buy it. Learn, test, modify.Quote from: blueskull on April 19, 2016, 07:35:11 am- I did buy two LEGO Mindstorms for my son (and myslef of course... don't tell my wife)... and I think I paid over $500 USD.Thank you guys. This discussion is helping a lot!

author: Kean
author_rank: Unknown
timestamp: April 19, 2016, 08:58:30 am
content: Quote from: robertferanec on April 19, 2016, 06:13:54 amSeeed seem to have two models -1) Propagate, where you pay for the parts & manufacturing up-front, and then they will optionally handle fullfillment or web sales (keeping a portion of sales)2) Collaboration, where they work with you on DFM, then they source the parts & manufacture it, then sell it in their store with you getting a portion of salesI had an open hardware project that was the most voted on Seeed "Wish" program, and so I was able to go through the collaboration model, instigated by them.http://www.seeedstudio.com/wish/?sortby=3d&filter=0&dr=0&wishes=99dd073c4bAs mentioned by blueskull, there are lots of options in China/HK other than Seeed. I've used Entech in the past because they also have an Australian office.The biggest issue is the language barrier, so a visit is very worthwhile, or an absolute necessity if you haven't dealt with them previously.I enjoyed a lunch and tour of the Entech facilities when I had to visit the Shenzhen factories to track down high failure rate on that product. Turned out to be ESD issues during final assembly

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 09:06:58 am
content: Thank you @Kean. I didn't know this.

author: Kilrah
author_rank: Unknown
timestamp: April 19, 2016, 02:34:44 pm
content: Quote from: robertferanec on April 19, 2016, 04:31:45 amBut realise that all the other board makers' intentions were precisely that. Seeing how they obviously haven't done so well even with relatively large staffing dedicated to it I'd wonder how 2 people for whom it's not the main project could manage to create an ecosystem of libraries, docs, courses and examples that would shake the world. The amount of work to create this, then more importantly (where it usually crumbles) maintain it is tremendous.Would love it and for sure wish you luck, but without much hopeQuote from: robertferanec on April 19, 2016, 04:31:45 amThen how are you going to make courses/tutorials that are appealing to the current generations? It's (for good or bad) essential nowadays to create things in a "modern" format and with matching promotion.Quote from: robertferanec on April 19, 2016, 04:31:45 amI'm starting to think you should pretty much forget about the board beyond being the example for the existing "hardware design course" product and not lose your time/money on producing it/offering it for sale like most others, but rather focus on what you actually want to do i.e. the software and documentation work and use another existing and cheaper board as a support like the UDOO neo that shares much of the philosophy (and hardware) and that you couldn't compete with at $50. Maybe you can sell your "soft" material for $250 to use on an UDOO board, instead of letting it be an "aside" for a $300 board that will cost you $200 to produce.Quote from: robertferanec on April 19, 2016, 04:31:45 amIt's not that they don't want to, it's that they just can't.Most of the outstanding software guys did not get there by following courses (they would actually typically hate courses/school/any kind of "guided" learning) but because it was pretty "natural" to them in the first place, and what didn't "click" straight away they figured out by dabbling/experimenting/self-documenting.They have no idea of how to teach nor to some extent why people might need to be taught, when they tell you to "look it up and figure it out" it's perfectly honest, it's literally the way they did it themselves, and the only one they know of. You can't ask them to do the very thing that doesn't work for them.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 19, 2016, 03:07:52 pm
content: Quote from: Kilrah on April 19, 2016, 02:34:44 pmYep, it's a lot of work. We have done the essentials of the project and for some time I can still support it from my own money. I suggested this topic as I would like to hear a lot of opinions about what should I do, so I can try to select the best path and get the highest chance, that later this project generates enough income to support and grow itself.Quote from: Kilrah on April 19, 2016, 02:34:44 pmI take it as a challengeQuote from: Kilrah on April 19, 2016, 02:34:44 pmOh, I can do blogs, videos, courses, tutorials, that is were we get our income from. What I am not good at is to create the nice promotion videos, fantastic looking pictures, organizing awesome events, ...Quote from: Kilrah on April 19, 2016, 02:34:44 pmI was not thinking about this and it's an interesting idea. I can see there two potentially hard areas:- we keep developing our own boards as that is what we use for our courses (it could be difficult to use someone else boards due licensing and IP)- I would like to avoid building future of my company on someone else product. That is quite dangerous.I will definitely think about this, it's a good idea. Thank you.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 20, 2016, 06:20:14 am
content: Guys, I have been thinking all night about what you told me. It looks like, the $299 USD will be an expensive board and people may not want to buy the board for this price.What if we make an "OpenRex Educational Kit" for children of 10/12+ with tons of examples from simple microcontroller programming and LED blinking (+ bread board circuit building) up to writing a Linux application with a nice GUI and simple game programming?Would you buy this for your kids or for you even if it would cost $299 USD?

author: blacksheeplogic
author_rank: Frequent Contributor
timestamp: April 20, 2016, 06:41:58 am
content: I think your board would be attractive at $299 if it came with the full (not subscription) Altium design course you have for it. On it's own it's just another a nice board but niche with no real community. Look at it as a seed to grow a community.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 20, 2016, 06:52:43 am
content: Which of the courses would be useful with the board?

author: blacksheeplogic
author_rank: Frequent Contributor
timestamp: April 20, 2016, 07:24:37 am
content: Quote from: robertferanec on April 20, 2016, 06:52:43 amNot sure how much crosses over to this board, but what about your Advanced PCB Layout Course or a course specific this boards design, the process which you can't get from the design docs.

author: robertferanec
author_rank: Regular Contributor
timestamp: April 20, 2016, 08:00:30 am
content: OpenRex is new, so there is no course about this board (yet). My plan is to make a software course for it (how to port Bootloader and Linux on an ARM board). Advanced PCB Layout is based on Rex module + baseboard.Maybe, the software course could be sold with the board. It is a good idea. Thank you.