We just launched our PRIAMBLE earphone earrings, and I would love your feedback! Their raison d'être: one needs different headphones for different occasions, and PRIAMBLE is not only very comfortable, but it meets the dress code. Also, unlike, AirPods (which I am a fan of), it doesn't end up on the floor! There are other reasons as well, but these are the more compelling ones.
Here's one idea: creating support pods for people, especially those in one-person households, so the members of a pod all automatically check on each other on a daily basis. And if something awful happens to any, a series of processes get kicked off (like calling family, local police/hospital, work, etc.) I have at least two friends who are single, who live on their own, and don't seem to have much of an immediate support system.
First of all thank you for taking then time to think this through.
Our MVP worked fine. In fact we were reviewed by the BBC last year. It's our new version that isn't ready yet. Our chip supplier has asked us to order 6 months ahead. We do have the BOM and the hardware files at this point. We are at the point of getting our prototype boards manufactured. But the state of the world is definitely a challenge.
We would like to take preorders for two reasons: firstly to convince VCs that there is a market, and secondly to gauge how many chips we need to order.
Thank you for helping me think this through. I am beginning to see some upsides to crowdfunding even though I am turned off by how manipulated it has become (with paid backers, etc.)
I agree. If we take preorders, we will make sure we can refund them completely if we don't deliver.
The idea behind taking preorders is to convince VCs that we have a market. They can get on TikTok and read the comments asking for our products, but I don't think that's going to convince them. Hence the need to have pre-orders.
Any idea how many pre-orders is enough to validate a new hardware product? The MSRP is $200.
Back when my startup started out, we took 10 orders although the product was B2B and the average order size was around $5000.
It convinced VCs of absolutely nothing. So I just went ahead and served those customers with a backup plan that the web services behind it could be run by the customers themselves if I folded.
To be honest, it didn't exactly work but I'm still going.
The product costing $200 isn't enough information to give an answer on proving the market. VCs don't necessarily put any value on a basic question of simpler product transactions. They want "eco-systems" and "crowd dynamics" and potential unicorns. You'd be better off with normal financing if you have demand for enough widgets to make a viable business, plus the bonus of not having to give up any equity to some disinterested finance bro.
Our TAM is $12 Billion, expected to reach $32 billion by 2025. It is a large, fast-growing market. We can definitely be a unicorn. But I have to dwell some more on the question of ecosystems and crowd dynamics.
That's the "moat" that the VC crowd want. Widgets aren't enough, we all just use contract manufacturers and any secrets you have won't be secret for long.
I like to use the (now failed) Logitech Harmony Remote. The remotes were good, not the best, but good. The real value was the massive database of equipment that the users put together. Logitech ended up with a massive, crowd sourced database of infrared remote commands that made the remotes much more compelling for the users who came later.
My widgets aren't special in any particular way (except maybe the firmware). Even if somebody grabbed the firmware, the real value is in the database of stuff that the devices are gathering, because individually it's worthless but at scale it's incredibly powerful.
We don't have venture backing yet. We were hoping to use preorders to convince vcs/angels. We really don't want to go the crowdfunding route because it has gotten increasingly gamed and crowded (!) Plus we already have a number of signups on our own website. I see a potential downside to asking our potential customers to go to a crowdfunding campaign.
I believe Shopify allows preordering. I was not aware that processors will freeze you out for taking preorders. Thank you for letting us know; we will look into this.
Here's our plan: get pre-orders. Take those pre-orders to potential investors to raise money. Fill orders. The idea behind the pre-orders is not so much to raise money directly but to convince investors to fund us.
