TechShop’s Andrew Calvo on new opportunities for hardware entrepreneurs
Here at RUKI, we’re conducting a series of interviews with hardware professionals who are changing the world of electronics. We’re keen to get their opinions on what the electronics industry looks like today and how it might shape the future.
For our first series of interviews, we traveled to San Francisco and Silicon Valley, ground zero for the hardware startup boom.
Calvo has worked in technology for many years. Before joining TechShop, he worked at Avid Technologies, which makes hardware and software products for the film and music industries (Avid’s most popular product for the music industry is ProTools,editing software used in recording studios around the world). Calvo also worked for O’Reilly Media, the company that launched the first Maker Fair and Make magazines for DIY-fans.
At TechShop, you see a lot of early stage startups. What are some recent market trends you’ve noticed?
Some people work on their products as a hobby. Others are full-time entrepreneurs who come in with an idea and want to build a product, and then we also have established companies who come to TechShop to experiment in the field of hardware. If we’re talking about startups, it could even be one guy just trying to make his first prototype to prove a concept and get funding.
We also see a lot of companies working in robotics. At TechShop I know one company that is working on a robotic sandwich maker. This device could build you a peanut butter and jelly sandwich and then put it in a box. Right now, it’s still a demo, but they’re trying to engage with restaurants and food automation companies.
We also work with companies that are using RFID technology (Radio Frequency Identification). One of them created a RFID badge and initially marketed it as a way for people to track their speed when running marathons and then later sold it as a device to track employees’ speed in the retail industry. Now the technology is used by Zappos, the online shoe company.
There’s another company that has created a frictionless way for people to shop. If you’ve got a RFID-badge, you can just go in the shop, pick up what you want, and walk out- the shop simply charges your credit card with the badge.
And another company uses the RFID-chips for a vending machines. You insert the RFID-equipped credit card, the vending machine doors open, you take the food item you want, and your card is charged the price of the item.
We have a very diverse membership base. One of our client companies, LIM Innovations, has been working out here for a few years and has been making prosthetic sockets for people who have lost a limb. They started with a prototype here and recently they received $3 million investment to keep the company going. So, they really stand out among others.
Do you see a lot of “Internet of things” startups?
Yes, I see some companies working in this field. We have one company that is working on a smart coffee machine. They want to be the next Keurig or Nespresso, but they use fresh beans instead of capsules. Their machine also has an app, so that you can adjust water temperature, strength, and other characteristics — they want to make a smart device for coffee making.
We’ve got one nonprofit that is building a waterless toilet, meant for use in the developing world. It is app-based, so you’ve an app that shows when to change a bucket. This project was done for Bill Gates Foundation’ competition to enhance living conditions for the developing world.
It’s also apparent that people are now using Arduino and Raspberry Pi, and are also interested in robotics and smart garments. We have a lot of variations, but I don’t know all of them, because there are more than a thousand members. Maybe 300 of them are starting a company, and the others are hobbyists.
Does TechShop help companies when they just have a working prototype?
Right now we only provide access to the tools and initial materials. We don’t help with business plans, although some incubators and accelerators have that educational section. We are in the Bay Area and there are so many resources for hardware companies that can easily be found. Companies can start with a prototype here and go to Y Combinator or PCH.
We also have an office of SFmade nearby. SFMade is nonprofit that helps founders once they created a prototype to find a manufacturer, so if you to scale product, they can find any manufacturer. And we’ve done some of small-scale business programs for members bringing business leaders here. It’s such a large task to simply provide tools and keep everything running as best as we can, so we don’t go into other areas.
There are a lot of successful examples of TechShop-members- what do they all have in common? Can you give any advice to hardware startups?
The best advice I’ve heard came from someone I really respect — Brady Forrest. He manages Highway1, which is a part of PCH, and his advice is to test, test, and test. So when you get this first iteration, start showing it to people. The most important thing is not to worry if something goes wrong, because testing helps you get to something that works. I think it would be a mistake if you were not testing, because you’ll lack the feedback from your target customers.
This autumn we had an event here that proved Forrest’s belief. It was called a Bay Area Makeathon for assistive technology. There were 20 teams working on a prototype for somebody with a disability. Each team actually had a member with a disability, so they were prototyping and were able to get an immediate feedback. Within three days, all these teams built prototypes. Some more than others, but all of them were fairly usable. For example, on one team there was a woman, who couldn’t open a door lock by herself, she had limited use of her hands and she was in a wheelchair. The team crafted a device for her and she was able to do it. The team succeeded because she was there for the whole three days with them.
Do you see the difference between previous generations of hardware startups and people who entered this market in recent years?
I definitely see a difference. In the past it was very expensive and you needed to have capital just to start building your product.
Now it’s much easier to create a hardware startup and scale it if you don’t have funding.
We are seeing that it’s really up to founders. If you have an idea, there is no excuse not to make a prototype, because it won’t cost you a fortune. After making the prototype, you can then use crowdfunding to test the market. We have seen many, many examples of people who come to TechShop, make a prototype that costs them a few thousand dollars, and then put it on Kickstarter. Even if it doesn’t succeed, they don’t have to invest hundreds of thousands of dollars into the initial prototype. So it’s a lot easier now.
As a marketing professional, do you see any common mistakes in positioning in the field of hardware startups?
I think the market has changed so much, that all advertising strategies are now invalid. Aggressive campaigns don’t work anymore and it’s become important to find the right users and show them your product to get valuable feedback. Again, it goes back to testing, getting your product out there.
Are there any differences between shops in different countries?
Currently we have 8 locations in the U.S., one more coming this summer in St. Louis. We also have shops in Paris, Abu Dhabi, and Tokyo. Right now, our strategy is to find the right partners in each region. For example, we work with Leroy Merlin in France and with Fujitsu in Japan, they are the third largest computer maker in the country. We need them because it is a very expensive process for us to open TechShop. It can be from $5 to $10 million investment to get a TechShop running- and $3 million just to open the doors. I think TechShop could operate in a thousand cities if we find the right partners. The most important thing is to work with people who really understand the TechShop concept and want to develop hardware startups and the maker movement in their country.
Every TechShop share the characteristics of its local community. Here in San Francisco, there are definitely a lot of businesses and artists, but in other cities the community can be different.
RUKI is a hardware incubator, based in Shenzhen, Moscow and San Francisco.
To find out more: useruki.com