February 2012 Archives

In 2005 I was in Tokyo at Ubicomp 2005. While walking through Akihabara, I noticed that they were selling last season's fake demo phones ("dummy phones") for cheap. I had been interested in the industrial design of phones for several years, because at that point, physical affordances were one of the chief competitive differentiators in phones. For example, after several years of criticism Nokia released a clamshell phone in 2004, expanding their design beyond the candy bar. Phones with slide out keyboards were becoming more common. (see the Wikipedia page on phone form factors for more info on all this) The relationship between the physical form of a device and it's social role was very interesting to me, and these phones, these experiments in changing the shape of devices that were functionally very similar, was very interesting. What did these different ways of holding a device, manipulating it and looking at it say to its users? What did it allow them to do?
You don't often get the opportunity to hold a lot of different phones and compare them side to side unless you're in a store, but the cheap phones in Akihabara reminded me that I could do that if I bought them, and at $2 apiece, I could do that. With the help of my girlfriend (now wife), we picked out 20 of the most wild-looking and different phones we could find. From that moment, and for the next couple of years, I was hooked. I bought several hundred dummy phones and a few working phones (though not many, since my per-phone budget was $3) on Ebay, often in batches from phone stores getting rid of last season's stock. What I didn't realize was that I inadvertently documented the last great design push before the iPhone made virtually every phone converge to the form factor of a black rectangle. The need for my planned physical affordance research was wiped away almost overnight.
The phones have been sitting in boxes in my house for several years and I've long meant to do something with them, so I decided that the easiest thing to do, for the moment, is just to photograph all of them and put them up, one per day, for as long as I have the energy or until I run out of phones.
Help wanted
For many of the phones I don't have the model numbers or years when they were released. If you know this, please click through to the Flick page and add that information, and anything else that seems relevant, to the phone's metadata.
Today's phone
DSC00037
DSC00038

Samsung Access SGH-827 from 2008.

NOTE: I realize this is not a particularly interesting phone to start the project with, but it's the first one I pulled out of the box. I promise there will be many wacky phones in the future, and more boring ones, and I'll try to regularly put interesting designs into the mix. There's only so many Nokia candy bar phones and Blackberry knockoffs that you can look at.

Last Thursday I was honored to have been invited to keynote the Internet of Things Day 2012 in Stockholm, organized by the Swedish Internet of Things Centre.

Since so much discussion of the Internet of Things is based on infrastructure technologies deployed by large institutions, I decided to take a step back and, with this presentation, talk about consumer-centered technologies created by entrepreneurs (which, to my surprise, turns out to be the focus of the new center, also).

Abstract
The technologies underlying most current Internet of Things visions are not particularly revolutionary. That of course doesn't mean that the visions are not compelling, just that the challenges in creating these visions have little to do with building new technologies. The real challenge is to identify what people want and need, and how -- or if -- automatic identification, distributed processing, and pervasive networking can help address those needs and desires. We need to think about how we're going to create the Google of Things, the Facebook of Things, the Foursquare of Things, the PayPal of Things, the Farmville of Things. It's not about the infrastructure, it's about the applications, and the applications are about people.

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The Internet of People: Integrating IoT technologies is not a technical problem (Swedish Internet of Things...

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Good morning. It's an honor to have been invited to this gathering. I have long been a fan of the work done by SICS and the Mobile Life center. Today I'm going to present my perspective on how the main challenge of meeting the big visions of Internet of Things will not be in on creating new infrastructure technologies, but in developing user-centered services, that the focus should not be on what digital things do, but how they can help people.

First, let me tell you a bit about my background. I'm a user experience designer. I was one of the first professional Web designers in 1993, where I was lucky enough to be present for the birth of such things as the online shopping cart and the search engine. This is the navigation for a hot sauce shopping site I designed in 1994.

I'm proud of the fact that 16 years later they were still using the same visual identity. These were some of the oldest pixels on the Web.

Here's one of my UI designs for the advanced search for HotBot, an early search engine, from 1997. If you're wondering why Google's front page is no minimal, I think it was because we were doing this.

Since then I've consulted on the user experience design of dozens, maybe hundreds of web sites. Here's one for credit.com, who were fantastic clients a couple of years ago.

I sat out the first dotcom crash writing a book based on the work I had been doing. It's a cookbook of user research methods. It came out in 2003 and the second edition [CLICK] will come out this fall.

And 2001 I co-founded a design and consulting company called Adaptive Path.

I left the Web behind in 2004 and founded a company with Tod E. Kurt called ThingM in 2006.

ThingM is a micro-OEM and an R&D lab. We design and manufacture a range of smart LEDs for architects, industrial designers and hackers. Our products appear on everything from flying robots to Lady Gaga's stage show. This is an RFID wine rack that we did about four years ago. The different light colors represent different facets of information that's pulled down from a cloud-based service, such as current market price. This is a capacitive sensing kitchen cabinet knob we did two years ago. It glows when you touch it to creates a little bit of magic in your everyday environment and was an exploration in making a digital product that would still be useful 20 years after it was made.

In 2010 I wrote a book on the user experience design of ubiquitous computing devices, which I define as things that do information processing and networking, but are not experienced as general purpose computing or communication devices.

However, ThingM and books are primarily side projects. My primary day job is as an innovation and user experience design consultant focusing on the design of digital consumer products. Here are some I've worked on for Yamaha, Whirlpool and Qualcomm.

The last couple of years my clients have been large consumer electronics companies and my focus has been on creating experiences that span multiple devices. I can't give you any details.

A lot of my projects broadly fall under the description of the Internet of Things, but that's a really challenging name to work with.

Talking about The Internet of Things is a hard because there are so many different definitions. This is Time Magazine's illustration of the Internet of Things for their "Best Inventions of 2008" edition. I love this illustration is because it makes no sense no matter how you think about it, which is actually quite an accurate representation of how confusing the many definitions of the Internet of Things are right now.

Let me give you my definition, which is pretty broad. For me the Internet of Things is the combination of distributed information processing, pervasive wireless networking and automatic identification, deployed inexpensively and widely. The underlying technologies and the applications that are traditionally discussed don't matter much, because it is this combination of factors that deeply affects people and industries, and it does it by connecting people's immediate experiences to the power of digitally aggregated and analyzed information. In other words, the Internet to Things turns physical actions into knowledge in the cloud and knowledge in the cloud into physical action in a way that's never existed before.

So, for example, I count the FedEx Sensaware smart tag and the Yottamark tracking system to be roughly identical. The Sensaware tag has a bunch of sensors, a GPS and the equivalent of a phone in it. It's used to track high value items, such as human organs, that need to be shipped under precisely maintained conditions. The Yottamark system uses stickers, readers and a wired network service to track things such as produce and car parts.
Technologically there's almost no overlap, but they both give people the ability to treat physical objects like they have been treating data packets. They bring the power and ideas of the internet to physical things.

I also count this to be a member of the Internet of Things. It's a cheap phone. It has all of the the core components of the Internet of Things and it creates many of the same social effects. People begin to use it in the same way.

You can see this in how people are using hacked phones to do cheap Internet of Things prototyping.

Here's a project by Tellart, a Rhode Island design firm, that uses cheap phones to inexpensively add wireless tracking and identification capabilities to chairs. They did this with an advertising agency working for a furniture client. They strapped a GPS-enabled phone to the bottoms of chairs and distributed those chairs around Manhattan, leaving them on street corners to look like trash. People of course picked up the chairs, and the agency tracked those chairs around the city and found the people who had taken them. They then did an advertising campaign with those people, asking them why they had taken that specific chair. This is exactly the same kind of thing that the FedEx Sensaware tag is doing, but deployed by a bunch of designers for an ad campaign using technology so old that it was on phones that were ready to be thrown away.

Here's a project that Eric Paulos did with Intel research. They attached mobile phone-based air quality sensors to garbage trucks to create a daily updated air quality map of San Francisco. The core piece of technology is the mobile phone, which at the time was the cheapest Internet of Things platform.

In other words, although it's discussed as an emerging technology, I believe that The Internet of Things is actually a combination of mature technologies, much more mature than people give it credit for. The reason it's climbing the Gartner Hype Cycle is because those mature technologies are now cheap, and the rise of smartphones has made people more aware what happens when you take a small bit of functionality, which is what an app is, and distribute it through the world. I believe that people are looking at apps and thinking to themselves "Why do I need that expensive phone, with all its capabilities, to do this one thing? Why can't I just take that app, pluck it off the screen, and put it into a dedicated piece of hardware that only does that one thing? These technologies are really cheap. I can do that."

However, if you look at what applications are currently given as examples of the Internet of Things, you'll see that they're mostly top-down large-scale centralized infrastructural applications. Here's San Francisco's parking system. It uses sensors in the street to see what spaces cars are parked in. It can tell you where there are empty parking spots and can dispatch meter maids to write tickets more efficiently.

But these projects are not the ones that I believe will have the greatest impact on the world, nor where the greatest innovation will lie. I believe that the greatest Internet of Things innovation, and the deepest impact, will come from small, risky projects undertaken by entrepreneurs working with existing infrastructures.

And I believe that this will happen as people bring online services into the physical world as specialized devices. Let me start by discussing a consumer electronics trend I've been working with for the last several years, which I believe points to a deep shift in how people think about products.

Over the last couple of years, there's been a collapse in device functionality. There is now little distinction between a phone, a tablet, a laptop and a smart TV, except for the size of the display. Anything can do anything, roughly speaking. This has been accompanied by a fall in profit on these devices.

Companies have recognized that this shift to increasingly generic devices has been accompanied by a shift in people's loyalty. People's associations are no longer with the device, but the service that the device delivers. Loyalty is not to the maker of the device, but to the services that device gives access to.

Let me give you an example. Netflix is a US movie rental and streaming service. To the Netflix customer, any device used to watch a movie on Netflix is just a hole in space to the Netflix service. It's a short-term manifestation of a single service. The value, the brand loyalty, and the focus is on the service, not the frame around it. Netflix works hard to reinforce this by creating a continuous experience across devices. You can pause a film you're watching on one device and unpause it on another.

Netflix has worked very hard to make their service available on virtually every device that has a screen and a network connection. They use every device available to bring what is perceived as a single thing to every corner of a customer's life.

Another example is the Kindle. Here's a telling ad from Amazon for the Kindle. It's saying "Look, use whatever device you want. We don't care, as long you stay loyal to our service. You can buy our specialized devices, but you don't have to."

Jeff Bezos is now even referring to it in these terms.

The upshot is that this perspective reverses a traditional way of thinking about technology. Rather than thinking "Let's build an infrastructure and then figure out how to use it. Now that we have it, what the applications of the technology?" this service-centric way of thinking about technology starts with a service, starts with concrete ways of creating value for people, and then uses every available technology to deliver that service. Of course Amazon started with the device, but they quickly realized that it was not the device where the impact and profit were.

As value shifts to services, devices, software applications and websites used to access those services--what I call the avatars of that service--simultaneously become more specialized and more secondary. A camera becomes a good way to take photos for Flickr, while a TV becomes a nice full-resolution Flickr display, and a phone becomes a convenient way to take your Flickr pictures on the road.

From this perspective, specialized hardware avatars begin to make more sense as people increasingly see "through" each device to the service it represents. Now they can recognize situations where a specialized device can provide significant value in using a service, while understanding that the service is not limited to that device.

I believe that this combination of factors will lead to an Internet of Things that are primarily services in the cloud, but services that have specialized hardware devices as one of their many avatars. This is already happening.

Let me show you a handful of examples that serve as early models. I'd like to start with these two, the Withings bathroom scale and the Nest thermostat. You've probably heard of both of these, but let me revisit them as avatars of Internet of Things services.

The Withings scale is an internet connected scale. At first it was kind of a gimmick. "You can tweet your weight to your friends!" was one of the ways it was originally pitched. That's of course not particularly interesting, but that was not the purpose of the device. The device is the avatar to a health service that helped you track your weight. The scale is the way the service differentiates itself from other weight tracking services, but the value is not in the scale, but in the service, which is fully experienced using other avatars, such as the ones depicted on the right.

Withings has now expanded the service to include a blood pressure cuff. Again, the value is not in the devices, but in the knowledge that they create by collecting simple pieces of information and then providing users with the full power of cloud-based services to make use of that piece of information. Withings can keep adding avatars, new sensors and new ways to display the information the sensors collect, without fundamentally changing the promise of the service.

The Nest thermostat is a wireless thermostat that takes it one step further by closing the loop and allowing the online service to make changes in the world. The service uses information collected from the thermostat, the internet, and people's behavior to learn what the optimal temperature conditions are for an environment given how people use that environment. The sensor is pretty simple, but the service it provides access to is sophisticated. You can imaging them branching out into a wide variety of avatars for collecting information about your house and then acting on it in interesting ways, automatically moving money you save to special bank account when you behave in a particularly energy-saving way, but they begin with this very simple one that's almost a physical manifestation of an iPhone app. It even looks a bit like an app.

There is a whole class of such devices that are essentially projections of a cloud service through a limited functionality hardware product. Here are some that monitor personal health and fitness, there's the Fitbit pedometer, the Zeo sleep sensor and the Bodymedia sensor that can sense heart rate, skin temperature and other senses. These are of course sensor-based devices, but what they're selling is not the capabilities of the sensor, but of the cloud-based service the sensor connects to.


Here are a couple startups focused on the home security sector. Lockitron lets you control digital locks over the internet, so that you can, for example, use your phone to create a unique code for people who are renting your apartment that only opens it during certain times, or keep track of when a specific door has been opened. Cam.ly takes cheap internet security cameras and adds many of the features that a sophisticated surveillance system provide, such as the ability to review many days of video quickly, or to have it alert you when it notices movement in a specific area. They charge $20 a month for this instead of hundreds of dollars. They can do this because most of the functionality is in the cloud.

My favorite example is still Vitality's Glowcap, which I've been talking about for years. This is a wireless network-connected pill bottle that's an avatar to Vitality's service for increasing compliance to medicine prescriptions. When you close the cap, it sends a packet of information through a mobile phone- based base station to a central server and it starts counting down to when you next need to take your medicine. When it's time, it lights up the LED on the top of the bottle.

However, the real power is in the packet of data it sends. That packet opens a door to the full power of an Internet-based service. Now Vitality can create sophisticated experiences that transcend a single piece of software or a single device.

For example, another avatar of the Vitality service is an online progress report that can be used interactively or delivered by email. It's like Google Analytics for your medicine.

Health care practitioners get yet another avatar that gives them long-term and longitudinal analytics about compliance across medications and time.

To me, this kind of conversation between devices and net services is where the real power of The Internet of Things begins.


Vitality has developed a wide range of avatars for patients, patients families, health care practitioners and pharmacies. Each avatar looks different and has different functionality, but they're perceived, and designed as a single system.

The Vitality system is an Internet of Things service that doesn't use any esoteric or complex hardware or software. It takes a model of a service that's long been popular in websites, one that has multiple touchpoints and which uses digital representations of personal relationships to create significant social effects, except that in addition to emails and web sites and apps, it also uses a couple small pieces of hardware. It treats the hardware as a part of the service, as an extension of the service, but it begins with the service.

Creating services like this is becoming increasingly straightforward. The whole Web 2.0 change was at its heart about creating tools for rapidly building and iterating Web services. Ruby on Rails, server virtualization and web analytics technologies created an ecosystem where it's very easy to provision new services and to iterate based on data about how people use the service.. This infrastructure then became used by app developers who used it to create hundreds of thousands of apps in just a couple of years.

Now we're seeing technologies that make it similarly easy to add specialized hardware devices to services.

I grabbed this image from Arrayent, who is a company that makes a little hardware blob that connects virtually anything, in this case a smoke detector, to their cloud service. It can make any device look like a Web site, and there are other devices like it on the market.
Source: Arrayent

Services such as Pachube, sen.se, Thingspeak and Axeda are now serving a similar role by acting as data brokerages that make arbitrary, different devices act consistently. Pachube, for example, allows an arbitrary data stream from any net connected device to share that stream with any other device. The service will do the buffering, the protocol translation, the analytics, everything. It's a system that has its roots in Web protocols and mashups, now connected to hardware.

Connecting devices to the cloud allows for rapid iteration on features, since most of the functionality of those devices lies in the cloud.

The key to success with the IoT is to move beyond thinking of it as an infrastructural technology, such as this diagram of an RFID system, and to stop letting the name give you the wrong expectations for what it is. The name is a distraction. it implies a parallel universe that is as pervasive as the Internet, but different because it's about things. That gives the impression that projects that don't try to be as ambitious as the Internet somehow don't count. That misses a key point. The Internet of Things is ALREADY as pervasive as the Internet, because it IS the Internet. What's different is that it's now incredibly cheap to connect anything to the internet.

Image from "THE INTERNET OF THINGS: From RFID to the Next- Generation Pervasive Networked Systems" (Lu Yan et al, 2008)

The real challenge is not thinking about how we're going to create the Internet of Things. We need to think about how we're going to create the Google of Things, the Facebook of Things, the Foursquare of Things, the PayPal of Things, the Farmville of Things. It's not about the infrastructure, it's about the applications, and the applications are about people.

Scandinavia, and especially Sweden, has led the world in humanizing digital technology for decades. The work at SICS and Mobile Life has been doing has been pushing the boundaries of understanding people and adapting technologies to their needs and desires. The rise of the Internet of Things is a fantastic opportunity for Sweden and I'm very excited to see what you'll produce, because I'm sure it'll be amazing.

Thank you.

Abstract
How can digital hardware startups be more like Github and less like General Motors?

The pieces that fell together to create the ecosystem of tools and business models that lead to the creation of Eric Ries' Lean Startup model for online products are now falling into place in the hardware sector. We're about to see an explosion of hardware startups based on the same ideas. Technological, social and financial changes are coming together to allow entrepreneurs to rapidly iterate new digital devices focused on customer needs. These core elements create a new way to conceptualize the development of digital hardware products. This talk will examine the components that are creating this change and suggest some directions we can expect things to go, and how we can take advantage of it.

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Lean hardware startups: elements of a ubiquitous computing innovation ecosystem

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Good evening. It's a pleasure to be here. I've been to several of these and it's always a pleasure to participate. Today I'm going to be presenting some ideas about how I believe the market for starting and running digital hardware companies is changing and how new tools have enabled us to start thinking about creating electronics using Lean Startup methods. The content in this presentation is speculative, and I'm looking for this to be the beginning of a conversation, so I'm looking forward to chatting with everyone afterward.
First, let me tell you a bit about my background. I'm a user experience designer. I was one of the first professional Web designers in 1993, where I was lucky enough to be present for the birth of such things as the online shopping cart and the search engine. This is the navigation for a hot sauce shopping site I designed in 1994.
I'm proud of the fact that 16 years later they were still using the same visual identity.
Here's one of my UI designs for the advanced search for HotBot, an early search engine, from 1997. If you're wondering why Google's front page was so stripped down, I think it was because we did this.
Since then I've consulted on the user experience design of dozens, maybe hundreds of web sites. Here's one for credit.com, who were fantastic clients a couple of years ago.
I sat out the first dotcom crash writing a book based on the work I had been doing. It's a cookbook of user research methods.
And 2001 I co-founded a design and consulting company called Adaptive Path.
I left the Web behind in 2004 and founded a company with Tod E. Kurt called ThingM in 2006.
We're a micro-OEM. We design and manufactures a range of smart LEDs for architects, industrial designers and hackers. Most Makerbots that have lights on them use BlinkMs, as does Lady Gaga's stage show, Italian theater productions and probably 300 Burning Man costumes every year. However, as a startup, it's mostly a hobby. It's no one's full-time project and makes enough money to pay for our employees and to have some left over for a couple of R&D projects every year. This is an RFID wine rack that we did about four years ago. The different light colors represent different facets of information that's pulled down from a cloud-based service, such as current market price.
In 2010 I wrote a book on the user experience design of ubiquitous computing devices, which I define as things that do information processing and networking, but are not experienced as general purpose computing or communication devices.
I also organize an annual summit of people developing hardware design tools for non-engineers.
However, ThingM, books and conferences are not my day job. They're entertaining sidelines. My primary day job is as an innovation and user experience design consultant focusing on the design of digital consumer products. Here are some I've worked on for Yamaha, Whirlpool and Qualcomm.
The last couple of years my clients have been large consumer electronics companies. I've helped them design new innovative products and services and to create more user centered company cultures. I can't give you any details.
About a year and a half ago I started a new startup called Crowdlight, based on some technology we had developed at ThingM. We were not successful at raising money or getting enough traction, so we mothballed it, but the difficulties we faced led me to thinking a lot about how hardware product companies are started, funded and, based on conversations I had with Joel Truher, who's here tonight, how we can import ideas from lightweight internet startups into the manufacturing space. How can we be more like Github and less like General Motors?
Let's first review the traditional challenges to hardware.
Traditionally, hardware takes a high initial investment because the philosophy is that you have to capture economies of scale, which means that you have to make 10,000 units or more of a product to justify making it at all. This creates a cascade of assumptions: well, if you're going to make 10K units, you'd better make the right thing and you'd better make them bulletproof because you likely can't afford to make two rounds the first time out. This means extensive market research and industrial design and engineering. If you look at the initial investment of most recent consumer electronics startups, you see pretty high numbers because of that very line of reasoning. Zeo, $2.5M initial investment; Fitbit, $2M Series A; Sifteo, $1M Series A after a $500K grant. Compare that to web/mobile companies and you see that they typically have much smaller initial investments. Here are the investments that Ugobe, who made the Pleo dinosaur got. One of the founders had earlier invented the Furby, so they were able to secure $11M their first year to make it to their first Christmas on the market in 2007. That's astronomical and if investors hadn't thought "Furby" the whole time, they would never have gotten such money.
The second big challenge boils down to logistics of moving atoms around. With atoms you have to assemble them, you have to sell them, you have to ship them. Let me use the example of ThingM. This is our first batch of BlinkMs from four years ago. We don't package them like this anymore..17!
because we had to do all of the packaging ourselves. You multiply any activity by 1000 and it sucks. But this was the least of our problems. To make our product we had to set up a supply chain. To make one of our LinkM USB dongles takes something like seven separate shipping events, and one part crosses the Pacific three times. To get to end consumers we had to build sales and distribution channels, which required collecting the names and contact information for every possible distributor of our product, That's more than 500 vendors we had to cold call. Then we have to ship them to the vendors. That requires finding a fulfillment service that has a good API and reasonable rates, then tying that into an ecommerce front end so that when someone from Germany wants to buy 150 BlinkMs and have them shipped three day air using their own DHL number, you don't have to figure that out by yourself, because--again it's not hard, when you multiply it by 20 orders, suddenly you're talking about two days spent at the post office filling out international shipping manifests. I know I may sound like I'm complaining, and to some extent I am, but only because these were the things that were really painful for us, and which are the hidden costs in creating a hardware company.
The bottom line is that because atoms are not bits, actions on them do not scale the same way as they in software. When you're working with bits, you can solve a problem once, and then your costs in solving that problem in the future are a tiny margin of the cost of solving it the first time. With atoms in the current system, when you solve it once, your costs of solving it subsequent times are actually a significant proportion of that first time. This really adds up, and this is what requires so much investment when the assumption is that you have to make thousands of a given item to make it worthwhile.
The pattern that physical products sells is different than online products. Because it's so much harder to scale their distribution dynamically, finances come in bursts. In consumer electronics, for example, it's a couple of giant bursts--Black Friday is the shopping that puts retailers in the black in November after ten months of losing money. As an OEM we see similar cycles, with a big burst at the beginning of the year when everyone has fresh budgets and then several smaller bumps throughout the year until another big one in September in preparation for Christmas. The issue with this is that baseline expenses are not bursty and they add up. if you miss a key burst of interest, say not having your products finished until November, you may not have a chance to make ANY money that season, and you're sitting on a bunch of inventory, which quickly becomes stale, and your employees, who need paychecks regularly. The traditional thing is that companies then sell their inventory at a giant discount after the big season is over so that they can pay their bills and hope they can use that make up their expenses to make it to the next burst. That's how stuff ends up on Woot at 1/3 the price nine months after its big launch. What this means is that the primary source of customer validation comes when its too late to change course. Steve Blank, the patron saint of the lean startup, says, "You don't know if you're wrong until you're out of business/money." He said it about traditional software startups, but it's even more true about products. (http://www.slideshare.net/venturehacks/ customer-development-methodology-presentation).
Investors are in the business of making money by managing investment risk, so when they look at traditional hardware startups they see a lot of extra risk. It's expensive to design and manufacture, you have to get the logistics right when moving and selling atoms, and the "time to traction" is long, so there are only a couple possibilities for customer validation every year.
Investors calculate how much money they would have to spend to reduce that risk, to hire experienced people, build infrastructure, get sales channels, and compare that to web/app startups, where expertise is high, the infrastructures are robust and cheap, and sales channels are pretty well established and have a low barrier to entry. They come to the conclusion then, that it just costs too much money to run a hardware startup given the risks. In other words, hardware startups are not capital efficient.
If you look at many of the hardware startups that have been funded lately, you'll see that they're actually Web services that have physical components. They're primarily structured as web services that use a very simple device to get a data stream into or out of the cloud. Most of the value comes from the service that's in the cloud. I don't know if these startups essentially presented themselves to investors as "Web sites with hardware benefits" or if they presented themselves as a new form of consumer electronic device that's hard to counterfeit/duplicate because the functionality is not in the device, but in the online service, but regardless the form of these devices is one that's effectively designed to mitigate the risk of making hardware.
I think that there's another way. I think that it's time to move the design and manufacture of physical products out of the Industrial Revolution cycle of design-make-sell. I think that it's possible to use the modern tools of digital fabrication, online collaboration and ecommerce to create a new way to make things, one that's much more responsive to customer needs, much more manageable for company founders, much less risky for investors, and one that does not create the waste that traditional make-first manufacturing creates.
In the same way that Ruby on Rails, server virtualization and web analytics technologies enabled the design and funding model that's at the heart of lean web ecosystem I believe there are a handful of trends that combine to create an innovation ecosystem for designing, manufacturing and selling digital products.
As with software-based startups, the key is to enable groups to rapidly iterate product ideas and designs based on measurable customer validation.
Let me me give a quick overview of how lean startups think about development. It's based on a mix of ideas from agile software development and user-centered design. The basic ideas is that you make minimal products, put them out in the world, watch whether and how people use them, and amplify the aspects that are getting traction. This is a slide from Steve Blank's 2008 on customer development that illustrates this basic idea.
First, let's start with tools that allow you to iterate designs quickly. There are a couple of technology changes that accommodating this.
Semiconductor manufacturers are putting increasingly more functionality on chips. Things that used to take five chips, as this diagram from Renesas Electronics shows, can now be done on one chip. This has all kinds of benefits from an assembly standpoint, but it also has an additional benefit. It creates an abstraction layer around a unit of functionality, in this case an LCD driver, to creates a single building block that's meaningful in human terms, rather than just electronic terms.
This is the start of object-oriented hardware. Each block is an atom of functionality that communicates with other blocks over a local network.
One block can do all of the work to connect to any phone network in the world.
Another is a complete GPS system.
Yet another is a multiaxis accelerometer that does the necessary math to clean up the signal.
This abstraction of knowledge into silicon means that rather than starting from basic principles of electronics, designers can focus on what they're trying to create, rather than which capacitor to use or how to tell the signal from the noise.
Still another is a single chip from Nordic that has both an 8051 microcontroller core, a wireless communication stack and a USB core. It's the core of lightweight wireless devices.
Once you have the breadboard design, you need to be able to get products out there, so you need assembly.
Fortunately, assembling electronics at small scales has gotten cheap. It's not just that it's cheap to ship stuff to Asian factories and to get PCBs made in small runs, but it's surprisingly inexpensive to assemble hardware in medium sized runs yourself. Not ten units, which you can do by hand, and not a million, which requires a serious setup, but, say 100, 1,000, or 5,000. This puts the idea of making small run electronics into cottage industry magnitude and brings it back closer to the hands of designers.
This is one of Sparkfun Electronics pick and place machines.
Source: Sparkfun
This is Adafruit's, who work out of a loft in New York. Source: Adafruit
This is DIYDrones'. These are small companies that are nevertheless big enough that they decided to make their own electronics, because it's now a reasonable business decision.
Source: Chris Anderson, DIYDrones
Of course only nerds will buy a plain circuit board, but if you put the circuit board in a case, it becomes a product. That's where all of the 3D printing and lightweight manufacturing come in. The price of 3D printing and laser cutting are coming down quickly and allow you to iterate rapidly on designs, then produce them in small quantities. It's not a great technology for making thousands of things, but for making 10, then making another slightly different 10 a day later, it's great.
This is a digital radio that David Mellis did as part of his MIT Media Lab master's thesis last year. It's designed to be a base design that can be quickly iterated on and to use cheap materials. Dave is one of the developers of the Arduino, and he intentionally made a very technologically simple product to focus on the core ideas of lightweight manufacturing and rapid iteration.
Here's the inside of another design based on the same idea. He ran workshops with people who had never designed a product and they would iterate on this idea and create their own versions in an afternoon.
Here are Mellis' costs. You can see that the unit price for the materials drops very quickly. With a device like this you can imagine making small numbers of a product quickly.
Connecting devices to the cloud, much like Fitbit, Nest and Zeo do allows you to both iterate quickly on features, since most of the functionality of those devices lies in the cloud- based service that they're attached to and to collect usage analytics.
Moving functionality to the Web is a pretty natural step. After twenty years of the Web, there's a lot of familiarity with it. Designers and developers are immersed in Web- like ideas. We increasingly think of digital technology as inherently anchored to the cloud and intuitively understand the possibilities that networked connections provide. There are embedded hardware products, hardware objects, that will do all of the provisioning of a service in the cloud once a connection is made. I grabbed this image from Arrayent, who is a company that makes a little hardware blob that connects virtually anything, in this case a smoke detector to their cloud service.
Source: Arrayent
Moreover, there are now services such as Pachube, which was recently acquired, that allow an arbitrary data stream from any net connected device to share that stream with any other device. Pachube will do the buffering, the protocol translation, the analytics, everything. One device publishes an output stream, another device then subscribes to it it. It's a system that has its roots in Web mashups, now mapped to hardware
One of the most exciting changes is the movement of hardware development tools online. Hardware development used to be a solitary activity done in a lab with an oscilloscope and a soldering iron. Now it's becoming increasingly a social activity thanks to a new generation of online tools. The more easily people can share the design of a product, especially across discipline boundaries, the more quickly that product can be iterated.
Upverter, a Y Combinator-funded startup that just launched their beta, is a product that integrates electronic design with social collaboration. It's sort of like SourceForge, or GitHub for hardware.
This is Fritzing, a open source project for online social hardware design. They will even print the circuit board for you and mail it to you.
Once you have social collaboration and the publishing and subscription of designs, schematics and code, you have the equivalent of View Source for hardware design. That, in turn, means that designers no longer have to start from scratch or from electronic textbooks or worry about asking noob questions on discussion boards. It's a model taken directly from how the Web grew.
The Arduino platform is probably the most mature and successful product to have come out of this type of collaborative technology environment. I'm sure everyone here is familiar with it, but I'd like to revisit it and talk about why it's especially important.
It's important because it's has become the reference platform that people extend to accomplish specific things. Here's the Ardupilot drone controller from the DIYDrones folks.
Source: DIYDrones
Here's one from All Power Labs that's used for precisely controlling an alternative energy gasifier unit.
Source: AllPower Labs
Here's Google's Open Accessory development platform. It's also based on the Arduino.
There were microcontroller platforms before, but the Arduino's popularity and flexibility makes it the Linux of Internet of Things hardware. Odds are that if you want to do something, there's a free design for it out there that runs on the Arduino. Thus, what makes it important has little to do with the actual hardware, but the community that's formed around it, much like the success of Linux wasn't because it was a superior Unix variant from the start, but that it was made that way by a community. The Arduino is therefore not the killer hardware app, but it forms the bedrock on which applications are built.
The final component of the ecosystem is probably the most important and least developed. It's a marketing and distribution mechanism that allows people to sell hardware in low volumes so that they can close the lop of customer validation, and perhaps cover their costs and generate operating income in the process.
Kickstarter, in this instance, acts like a group buying site for products that don't exist yet, giving developers feedback about the popularity of their idea and teaching them how to position it for a market before they've made a single product.
Etsy allows very small run electronic products.
Even fab.com, which sells limited edition high design products like rugs and backpacks sells low run electronics.
These channels are immature, but they're becoming increasingly popular. In effect, they're doing an end run around the traditional consumer electronic sales channels to address the long tail of electronics buyers. That also happens to be where much of the greatest innovation happens.
If we look at Eric Ries' definition of what makes a lean startup, here taken from Wikipedia, we can see all the pieces in this new ecosystem.
The tools are free and open. The costs for testing and assembly are low.
Object oriented hardware and social tools enable rapid iterative design and development, while cloud computing allows for rapid deployment of associated services.
Although they're immature, we're getting increasingly more low volume sales channels to test out ideas. I've singled out Kickstarter because in addition to sales, it provides feedback even before there are any sales, which is even more in line with the lean startup philosophy.
In the end what I am describing here is not the Internet of Things, or ubiquitous computing, but it is the innovation ecosystem that will lead to the Internet of Things.
When you put these approaches together, you start to see a new way of making things, one that's more like creating software than industrial manufacturing. By allowing small batches of products to be made, sold and distributed, you reduce the logistics required, create a channel for near- immediate feedback, and shrink iteration cycles to from years to months. Taken together, these practices enable an ecosystem where people can be more creative, creates a method where designers can be more responsive to niche markets, reduces the risk of investing in product companies, and reduces the amount of investment required.
There are of course downsides to working like this, but I believe that they're outweighed by the enormous potential of creating lean hardware startups that focus on the challenges of designing digital products that make people's lives better, not how you ship five thousand things from point A to point B.
I plan on pursuing these ideas in a practical way this year. ThingM is going do a couple of Kickstarter projects for various ideas we have, and I'm looking for collaborators who are interested in working this way to create a new generation of products and ventures. If you're interested, please talk to me.
Image: Legend Performance Cheer box prototype by Abraham Peters

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