How to Save Money and Reduce Risk Developing a New Electronic Hardware Product

This article was originally published on Predictable Designs (a company that helps entrepreneurs and makers develop new electronic hardware…

John Teel
3 years ago

This article was originally published on Predictable Designs (a company that helps entrepreneurs and makers develop new electronic hardware products). Download their free cheat sheet 15 Steps to Develop Your New Electronic Hardware Product.

Bringing a new electronic product to market is generally difficult, risky, and expensive. To succeed, and make it to eventual profitability, you need to focus your early efforts on minimizing risk and cost.

Of course, nothing is ever free and even reducing your risk and lowering development costs has a price. That price is usually either a longer development time, or a higher manufacturing cost. A higher unit cost means lower profits. Obviously profit is hugely important, but not when you’re first getting started.

Your first goal should be to get your product to market as cheap as possible, as fast as possible, all while minimizing your risk. You have to think positive and have confidence in your product, but you should always strive to keep your risk low, just in case the product isn’t the huge hit that you hoped.

But maximizing profits is something you should focus on AFTER your product is on the market and you have some initial sales success. Focusing on maximizing profits is pointless if you go broke before you even get your product on the market.

It’s also pointless if your product fails in the marketplace. This may happen because you designed a product no one wants, or you were so long developing it that you missed your window of opportunity.

If your budget is limited (and who’s isn’t!) then it’s especially a mistake to worry too much about profits during the development stage.

That being said you don’t want to develop a product that will never be profitable. You need to have a plan on how to reach eventual profitability. So this means you should know how much it will cost to manufacture your product once you have the sales and capital to support a fully custom circuit solution.

Below are three of the best ways to not only reduce your costs but also to minimize your risk developing your new product:

Hire an independent engineer to review the design

Prototyping a new product isn’t a cheap process so it can save significant money to ensure the design is right before prototyping. It’s much easier, cheaper, and faster to instead make sure the design is right before creating a prototype. I’m not saying that getting a second opinion will make your first prototype perfect or immediately ready for market. Even with design reviews most products still require a few tweaks to get them right. But the number and severity of the changes needed will be drastically reduced.

Having another engineer review the design before prototyping is one of the best ways to reduce your development cost as well as reduce the total development time. Even for products I personally design I always welcome a second opinion, especially for more sophisticated products such as those with wireless functionality.

I also provide design reviews for products developed by other engineers so please contact me if you are interested in having me review a design.

Use electronic modules for complex functions

So how do you reduce risk and save money when developing a new electronic product? One of the best ways is by using electronic modules for at least some of your product’s functions.

Electronic modules are a self-contained assembly of electronic components designed to perform a particular function and to be integrated into another system or product.

When designing an electronic function there are two main ways to go: a custom circuit, or a module. Most products are either fully custom circuit designs, or a combination of custom circuits and modules.

Rarely can a product be taken to market using only modules. However, early proof of concept prototypes, based on a development system like Arduino or Raspberry Pi, are many times 100% module based.

It is very common for a new product design to have a custom circuit for the microcontroller (the “brains”), and other relatively low-risk secondary functions such as power management, alarms, LED displays, etc.

Then for more complex functions such as Bluetooth, cellular, or GPS a self-contained module may be incorporated on the same Printed Circuit Board as the custom designed circuits.

Of all functions offered in electronic products one of the most risky and expensive to implement is wireless functionality. This is why, in most cases, I recommend starting with modules for any wireless functionality.

If your product requires Bluetooth Classic or WiFi then you should definitely consider using a wireless module, at least initially. BlueGiga (now owned by Silicon Labs) offers a nice selection of quality Bluetooth and WiFi modules. They even offer a Bluetooth Classic module (the WT-41) that has a range up to ¾ of a mile!

GPS is a wireless technology that I definitely recommend implementing using modules. This is because the radio signals coming from the GPS satellites are extremely weak. So the GPS circuit must be absolutely perfectly tuned in order to receive these signals. In fact, it will usually take at least a couple of board revisions to get it right.

One possible exception is Bluetooth Low-Energy (BLE) because it is relatively low risk to implement as a custom circuit. This is because it only requires a single microchip to implement and the range is relatively short. That being said, BLE modules are extremely affordable so you’ll need manufacturing volumes of several hundred thousand units to justify the cost of developing a fully custom BLE solution.

Minimize your FCC certification cost

The other huge benefit to using modules for wireless functions is they eliminate the need for FCC certification (assuming you sell your product in the USA). This is an expense that many, many entrepreneurs neglect. That can be a fatal mistake.

Getting FCC certification is an expensive process, and many times a long process. For a wireless product the only way to avoid this process is to use a module that has already been FCC certified.

Regardless of the technology if your product uses a custom circuit design to transmit radio waves then it must be certified by the FCC before you can sell it in the USA. Other countries require similar certifications.

Actually any new electronic product requires FCC certification to be sold in the USA. However the FCC classifies products with no wireless capability as non-intentional radiators. A non-intentional radiator certification is many times cheaper and easier to obtain than the intentional radiator certification required for wireless products.

Note that GPS doesn’t require FCC certification since it’s a receive-only technology. However, because it’s a challenging technology to custom design, I still recommend a module be used initially.

On the other hand, Bluetooth Low-Energy may be fairly easy to custom design, but it will still require FCC intentional radiator certification. So a BLE module is still the best option for many products.

Modules have numerous advantages, especially for wireless functions. They offer a way to reduce your risk, reduce your development cost, simplify FCC certification, and get your product to market much faster.

For Bluetooth (Classic or Low-Energy) the use of modules also allows you to save $8,000 USD by eliminating the requirement to join the Bluetooth Special Interest Group. Think of this as a licensing fee for using the Bluetooth trademark.

The only two downsides to using modules are increased unit cost, and possibly an increased product size.

No doubt that incredibly small modules are available, but using them will still probably take a bit more space than a fully custom circuit design. You also may be more limited on how you can shape your electronics board because of the fixed size of the module. This won’t be an issue for most products. But for products where size is critical, such as wearable tech, it may be difficult to bring a product to market using modules.

Unless you have an unlimited budget, or a product that has to be insanely small to succeed, modules are the way to go initially for many advanced functions.

Originally published at predictabledesigns.com.

John Teel
I'm an electronics design engineer, entrepreneur, and founder of Predictable Designs.
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