Batch After Batch: Alternative Funding for Hardware Production

Angel and crowdfunding are probably the most cited and used methods to raise funds for new product development. Even more established companies like Target have used crowdfunding to gauge consumer interest in terms of backer dollars to see if their concept is worth making. Both avenues are great for when you need funds to get started or continue development, but what if the development is done and you just need funds to get your validated design into production? Savvy hardware developers have used GroupGets to raise millions of dollars for hardware production over the past few years. They didn’t have to sell equity in their company, go into debt, or spend tens of thousands on marketing to do it either.

If you don’t know what GroupGet is, it’s an online group buying platform for products that are already on the shelf. It was originally made by hardware developers, for hardware developers, to get access to components with high minimum order quantities, like the FLIR Lepton LWIR core when it first launched. Over time the mission expanded to funding production runs of PCBAs for vetted designs. We didn’t envision that from the start but when someone first “use-case-hacked” our site that was built to hack minimum order quantities, we were pleasantly surprised.

The barrier to entry on the platform is pretty low — send us a working sample that is not a weapon, extremely dangerous, or generally illegal. We’ve been shipped all three categories and while at times entertaining, we have to pass on them. Other than that, there’s not much that we say no to in the hardware domain but getting on the platform will not guarantee success. We’ll get into that later.

Risk is also pretty low on both sides of the buying and selling equation. It costs nothing to put your product on GroupGets and no backers of your campaign get charged if your campaign does not hit its quantity target. If your hardware already has a user base, community following, or meaningful purpose, it can do very well on GroupGets. We’ll help with some basic marketing on our social and email channels but we are not magicians. You will need to roll up your sleeves and tap your own channels to get the word out. If you don’t have that, we have partnered with Hackster.io who can help you market your campaign as a service.

One of the best examples of hardware production fundraising via GroupGets is the AudioMoth wide spectrum acoustic logger. AudioMoth is a Silicon Labs Gecko based portable audio logger that can be easily configured with a GUI to trigger and record audio samples to an SD card. It’s widely used among conservationists, ecologists, and environmental scientists to record animals and insects in their natural habitats. It’s also used to listen for harmful human activity in forests such as illegal poaching and logging.

Developed by The Open Acoustic Devices team, or TOAD as we fondly refer to them, this device just wrapped its eighth round of funding on GroupGets. To date, they have raised over $500k to fund production for over 10,000 units, shipping, support, and continuous improvement of the design.

The tightly integrated flow of how we worked together to raise production funds for their hardware is summarized in the quick 5-step process below:

• TOAD created a campaign for AudioMoth with a time limit and a minimum order quantity that must be met before the time expires. They made it clear that the lead time will be multiple weeks since the devices will go into production at the close of the campaign.
• Once the campaign time limit expires and the target quantity is met, we charge all of the backers.
• We then send the backer funds to a production house of the designer’s choice. We can work with any production agency of our client’s choosing and we can also make introductions to others upon request.
• Once the production agency ships us the units, we ship them out to over 60 countries.
• Start over and repeat the process in a new round.

A large part of their funding success was that they were great at building a community for their hardware that already had a meaningful purpose. To accomplish that, they teamed up with the Arribada Initiative whose mission is to put more open source and lower cost technology into the hands of environmental field researchers. They also published an academic paper on their process and attended numerous conferences to promote their work and the work of their user base. It is a stellar example of how to get strong funding results on GroupGets with minimal marketing spend in terms of dollars, but certainly a lot of effort from a dedicated super team.

Repeated rounds are an important differentiating feature of GroupGets, and some campaigns have done over 20 rounds. If your product finds funding success on the first go, there is nothing stopping you from coming back to fund and release more batches of your hardware. Motivations for doing multiple rounds vary. Some designers want to limit a design release and get user mileage and feedback in a more controlled setting before they go to larger distribution channels. Others simply don’t want to stock inventory and only make products to order in quantities that make business sense.

Where have some new hardware products gone after GroupGets? The FLIR Lepton went just about everywhere including the inside of smartphones.

The LoFive-R1 breakout board, designed by Qwerty Embedded Design for the SiFive FE310-G002 MCU, went straight from GroupGets to Digi-Key. Others have the opportunity to go to SparkFun via our “GetSparked” collaboration with them. The AudioMoth simultaneously sells in our store for a higher price than its group buy campaigns as a convenience for researchers that can’t wait for the longer Group Buy lead times. Bottom line, there are multiple pathways to take after successful hardware fundraising on GroupGets. Its easy and low-risk to try but the best results come with mission-focused hardware and a solid game plan on how to get the word out about your campaign. As always, feel free to reach out to us to talk through your next great hardware production campaign.