Sharing “BOM anatomy” early in the process could have saved Juicero and maybe your hardware startup as well

Cost is one of the most fundamental elements in the product development process for manufacturing companies. As much as it is important, manufacturing companies tend to miss it for different reasons. One common reason is the absence of transparency and data visibility. The same data can be hidden behind layers of design, emails with subcontractors and supply chain.

The story of Juicero, a hardware startup that designed the sold a $400 machine to press juice from special packs was trending a few weeks ago. It all started from Blumberg’s story Silicon Valley’s $400 Juicer May Be Feeling the Squeeze. Long story short: the device is way too expensive and the startup over-engineered everything having to do with the product. In the brilliant article by Ben Einstein in the Bolt blog, Here’s Why Juicero’s Press is So Expensive he discusses why things went so wrong for Juicero.

At this point, it has become clear that Juicero spends a LOT of money on machined parts. I would venture to say a majority of the bill of materials is devoted to machined parts, which is highly unusual for a mass-market consumer product. In this single sub-assembly, we have 3 complex aluminum parts (drivetrain cover in green, drivetrain housing in blue, and press platter in yellow) plus expensive steel components like the ACME screw (purple arrow) and the massive final two gear stages (red arrow).

Most hardware startups avoid machined parts as much as possible because the cost doesn’t decline much as production volumes increase. Sometimes a company must have one or two of these large machined parts; Juicero has eight of them. But these aren’t just ordinary machined parts: many have multiple machined surfaces requiring different CNC setups, carefully located precision holes, and complex surface machining like the part below (blue arrow) where a tiny, rounded end-mill goes back and forth hundreds of times to make the surface rounded. While it’s hard to estimate exact costs without spending a lot of time analyzing the product, my rough guess is these parts account for over 50% of the BOM cost.

So here’s the thing. BOMs are neglected by people in early stage hardware companies. There are many reasons for that. Excel is easy. PLM is expensive and complex. The business and investors wants to move fast, so “move fast and break things” can work in many cases, but not when it comes to the BOM. Because as a team you will likely miss important data points by neglecting the BOM.

We believe openBoM can solve these problems by placing a mirror in front of engineers and managers. openBOM put your team literally “on the same BOM”. By sharing and accessing a BOM in a real time (exactly as Google sheet does), you can see the anatomy of your BOM and see a problem early in the process. Will it solve the problem of over-engineering? Nope. If your engineers want to do so, they will over-engineer. But, it will solve the problem of communication which is the biggest problem with distributed teams. The following two video show you how easy a BOM can be shared between team members. The first video shows how you can manually share a BOM with others in the team.

The second video shows how by using Team Sharing, designated team members have instant access to a BOM generated from a CAD package (Onshape).

Conclusion. Communication is one of the biggest problems in distributed teams. And in a startup building hardware, it can be the issue that will kill you. Sharing an anatomy of BOM in a real time can save your hardware startup earlier in the process by allowing to everyone to spot the problem early one.

Register for openBoM for free here and tell me what do you think.

Best, Oleg

Pic credit Ansonlobo [CC BY-SA 4.0], via Wikimedia Commons