New business idea. Need your feedback

[xhcsurge]

Hi everyone,

A friend of mine is a brilliant engineer. He's specialized in electronics and he makes stuff in his spare time as a hobby. He has a job as an embedded software engineer in a company that makes devices for hospitals (such as an emergency button). His knowledge is now at a point where he finds himself capable of creating whatever device or module he wants.

I, on the other hand, don't have any technical knowledge. But I have sales experience (including cold calling) and I believe I can land him some projects. We'd like to start a company that creates small, custom electronic solutions for companies.

That's the idea, and that's where I need your feedback. Do you think the two of us could start a thriving business? What will it depend on? Should I focus on a certain kind of companies to call? Should I keep working part time while he builds the devices? Do you have examples of companies that started this way?

This guy is really good and it would be a shame not to try starting a business as a team...
Thanks in advance for your comments!

 

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[Durete]

Interesting concept,

This would be a very specific and small clientele, but who knows, you might be able to make it work.


Going to play the devil's advocate here:
I think your two biggest concerns would be:

- Why would I need a custom electrical appliance?
- Why would I buy from you, instead of getting an item that is already in the market(that might not be as good, but probably a lot cheaper, besides..hey we're already using that for the last 5 years.)

Small businesses in general do not require custom made appliances, bigger ones...already got their dealers or ways of doing things.


(Not to demoralize you, but some things to think about.)

 

[David Wills]

I think that what you should do is defining the idea. What kind of creates small, custom electronic. Something that has helped me is to set a list of strenghts and weaknesses and then do research and research about what is needed in the market.

Also, remember that working with a friend is not the same that chilling out. Problems will appear, for sure, you have to be clear about his character and yours.

Best of luck,

 

[Journey2Million$]

You can build custom devices for small niches that are not targeted by the big electronics companies.
It's up to you to find out what kinds of electronic devices the public needs that aren't being manufactured.
Once you build the prototype you can go to a manufacturer and have it mass produced.
One thing you could make is an adapter which would allow people to use PS3 arcade fighting sticks with the PS4.
There used to be no such thing. I don't know if anyone has begun making them yet.
You can also make novelty products like the dancing water speakers.
I'm sure there's a lot of fun product ideas like that that you could make.
People are bored and they want things to amuse themselves with.

 

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[PhotoKid95]

You might be able to find some great ideas from here: http://www.thisiswhyimbroke.com/
They're all great products, but some of them have bad reviews because of its quality and functionality.

Hope that helps!

 

[xhcsurge]

Thanks everyone for your replies!

However, I think you misunderstood what I meant with "Electronic devices". We're absolutely not targeting the consumer business (ps4 stuff, water speakers...). This market is indeed over served, and it's impossible to work cheaper than the chinese.

What I meant was custom electronic solutions that are unique in every situation. For example:
- A device that sits on a conveyor belt and beeps when an object passes by
- A module that steers the air fans in a hangar based on simple input by a human
- A connection module to have two production machines communicate

These are just examples. I don't know what our customer will need, but I think that if we are able to sit together with some plant managers for 30 minutes, we can ask them if they could think of anything.

Thanks again for thinking along!

 

[jesseissorude]

Hey! Electrical Engineer here. Your idea actually isn't that outlandish. There are tons of companies that do custom embedded solutions for things like electronics in the backs of airline seats, medical devices, alarm systems, automotive entertainment stuff, etc.

I'd find a company that does this (preferably a few states away) and try to ask questions. You could also talk to a company that has outsourced these types of electronic projects to people. Do you have any relationships with business owners in your town? Ask them if they have used these services or know anyone you should talk to that has.

 

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[xhcsurge]

Yes, that's what I was thinking. This is the century of automation. From now untill the year 2100 thousands and thousands of jobs are going to get replaced by robots. This business simply hás to grow significantly over the next 10-20 years, and I want a piece of that pie...

 

[xhcsurge]

I'd find a company that does this (preferably a few states away) and try to ask questions.

OK here's the plan. I'm gonna try to meet some senior business people who have operations experience in factories and plants (e.g. plant managers, production planners, etc..) and find out how automated today's factories are, and whether they think this kind of business could work out.

In the mean while I'm going to build our website and create nice looking product sheets of the hobby products that my friend has built so far.

One more idea:
Once I start the business, in order to get a hold of that first-contact meeting with big companies, I was thinking of sending the plant managers a nano-drone ($15) without remote control, and attaching a note to tell them they can have the remote control if we can talk to them for 30 minutes in their offices. How does that sound?

Any of your thoughts are welcome!

 

[healthstatus]

You could also go the other direction and work with the manufacturers. Find that conveyor belt manufacturer and find out if they have requests for one off devices that attach to their systems, they might even share their customer list.

 

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[BigBrianC]

I haven't looked much into it, but you could start developing modules for Project Ara.

http://www.projectara.com/get-involved/


I like the idea of making custom electronic solutions, you could also find one product that has high margins and sells well and just go with that route and become the leader in a niche area, but one that is important.

 

[xhcsurge]

I haven't looked much into it, but you could start developing modules for Project Ara.

http://www.projectara.com/get-involved/

You could also go the other direction and work with the manufacturers. Find that conveyor belt manufacturer and find out if they have requests for one off devices that attach to their systems, they might even share their customer list.

Thanks again for your remarks! Project Ara is going to be too tough. My friend is good at electronics, but his skills are not of that level (especially the pocket-size is hard to work with)

Working with manufacturers is a great idea. While contacting big companies and their plants we might as well contact machine builders and see if we can help out somewhere.

by the way I'm wondering if his skills alone will be enough to keep the business floating. The things he builds are going to have to bring in enough money for the two of us to survive..... Unless I keep working parttime while doing the sales part

 

[healthstatus]

The things he builds are going to have to bring in enough money for the two of us to survive..

You will need to focus on the ROI, if he puts together $50 of parts but saves a company the need for an employee, your gadget can easily be sold for about 70% of the cost of the employee, and if you have good sales skills it would be 70% of the three year cost of the employee, as most businesses use a three year ROI as a baseline measure. Don't use a factor of materials and time to come up with your pricing.

 

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[LibertyForMe]

I know of a dirty steel mill that implemented a remote control water blaster inside a hard to get to area. They were having to pay people to clean it, and it was pretty dangerous, so this company installed these guide rails that the waterblaster could travel along, hooked it up to a camera, hooked up a small water jet to periodically clean the camera lens, attached a high power flashlight, and set the waterblaster up to a joystick so it could be operated safety from a remote location.

Stuff like that will become more and more popular I would imagine.

Just a random example to get you thinking.

 

[xhcsurge]

I know of a dirty steel mill that implemented a remote control water blaster inside a hard to get to area. They were having to pay people to clean it, and it was pretty dangerous, so this company installed these guide rails that the waterblaster could travel along, hooked it up to a camera, hooked up a small water jet to periodically clean the camera lens, attached a high power flashlight, and set the waterblaster up to a joystick so it could be operated safety from a remote location.

Stuff like that will become more and more popular I would imagine.

Just a random example to get you thinking.

Yes, sweet. This is exactly the kind of solutions I'm talking about. You're saying "Stuff like that will become more and more popular I would imagine". Does everyone here agree with that? To what extend is the age of automation already behind us?

Thanks for thinking along. This is all really helpful!

 

[mayana]

I think you could definitely make a go of this. My dad has a business where he does something similar (but not on the electronic scene). He does it for industrial customers who need specialized tools or equipment. There are SO many industries out there where they absolutely have to have someone come in a customize a solution for them, since not everything can be cookie-cutter.

 

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[LibertyForMe]

The problem you will have is finding good leads for work, since you don't have any relationships.

I would partner up with an existing business in an industry you like; pick a business that doesn't have custom fabrication abilities. Basically, tell them you will be a new product line for them and they don't have to do anything. You will give them XX% of gross revenues from each lead they send you that converts to a deal, and they don't have to do any work.

Then, they will be incentivized to sell to their existing customer list for you.

 

[xhcsurge]

The problem you will have is finding good leads for work, since you don't have any relationships.

That's where I come in. Its what I love doing and what I'm training myself in right now. I sell IT projects to large firms, and my job is to secure the initial meetings with IT managers and Sales managers.

I would partner up with an existing business in an industry you like;

That's a great idea. In addition to contacting large plants and factories, this could be a backup stream of small projects. Taking notes here

I think you could definitely make a go of this. My dad has a business where he does something similar

Great great! That's what I need to hear to keep my head up! Can you tell me how he started the business? The initial years must be the hardest. How large is his firm? How did he secure his initial customers? Feel free to ask him for 1 line of advice to a rookie like me!

 

[mayana]

Great great! That's what I need to hear to keep my head up! Can you tell me how he started the business? The initial years must be the hardest. How large is his firm? How did he secure his initial customers? Feel free to ask him for 1 line of advice to a rookie like me!

It was more difficult than he thought it was going to be to get started off, but the thing that helped him were relationships. He used the network of people that he already had, and worked on developing a bigger network. Like in a lot of things, it's all about who you know... plus, people hire the people they know and like - and those who they've already hired before. So once he gets his foot in the door somewhere, they always call him back, even if he has to contract out some of the work, they trust him to figure out the best solution.

I guess the best clue out of this is just to figure out who you need to be chatting up. In my dad's case, it's not always the company president (though, that helps lol). It's the plant manager, maintenance engineer, etc - the guys who know first-hand about the issue and have a lot of influence with spending, or can make direct spending decisions.

 

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