How to start a home business (for Electronic Engineer)

[EEVblog]

test equipment, standards/reference... for the measurebators, doing it everyday

Was just talking to David2 about this the other day.
Talking about a product idea that eventually tangented to something along the lines of a lab voltage reference standard. Much like that Geller guy:
http://www.gellerlabs.com/

He was kind of the defacto standard for cheap lab reference standards, but he decided to shut down.
Bingo, a niche has just opened.

I argued with David2 that it might not be worthwhile financially if you did it properly (e.g. test, burn in, and characterise each unit), but I didn't run the numbers, that was just a gut feel.

[coppice]

Thank you very much for enlightening me.
But how do you discover niche market ? Audiophile market is filled with products

The audiophile market is a weird one, usually requiring a lot more BS than engineering. There are related markets, like effects for guitarists, where small players still do well. However, if you don't already know much about the market, its probably not for you.

, Fire detectors/alarms requires a lot of certification and filled with all kinds of things.

Certification is not the issue with building automatation type devices, like fire detectors. The real issue is you need massive volumes to get the pricing needed to succeed. Prices are very very aggressive.

In UPS/Power electronics, research is expensive and risky and price is very competitive. People don't care about efficiency but price.

The UPS market, and related areas like solar power, are diverse. Some buyers only care about price. Others will pay a lot for efficiency. However, if you don't know to get to an efficiency of 96% or 97% you'll probably be in the bloodbath market.

In LED lighting, money goes to LED manufacturer

LED makers get a very poor price. People making systems from LEDs make more money. There must be opportunities for specialised LED lighting solutions for various niches, but if you try to get into the LED volume market as a new entrant you will be crushed.

What do you think ?

I think you need to do a lot more thinking about how you specifically might be able to find a niche where you can play. Looking at market segments as a homogeneous whole will lead you to the conclusion than none of them are accessible to you.

[Galenbo]

- I purchased a CNC mill on the first day. I had no idea how to even turn it on, ....As things progressed, I continued to learn. The company got two 5-axis mills, advanced software, tools, .... That is when I sold them - goodbye CNC's. I know how it works and now can effectively outsource my parts.

I have absolutely the same expierience on those things. I needed to get aluminium welded, nothing special, but I was:
-unable to choose between different welding/part/joint methods.
-unable to estimate the job in dollars.
-unable to communicate to good welders in a meaningful way.
-unable to select good welders or companies.

So I bought a good TIG AC/DC device, a helmet and a cooler. 100 hours later I could do a basic job and many hours later I reached to do other things as well.
I will never be the best welder, fastest welder, most productive welder, but the knowledge is often used in project without me welding.

An there will always be occasions when outsourcing goes terribly wrong, and a last-minute solution is needed.

... I can now outsource effectively. I know how and what to communicate.
The point is, outsourcing is not easy at all and ....
Starting a small business where you have ALL the skills to go end-to-end is my recommendation. Build a foundation and get a head of steam before hiring people and outsourcing engineering.

You definively need to master ALL skills in a startup or small business. Also towards the customers, it's the NUMBER ONE advantage that a small business has against the big companies.

[hamdi.tn]

I started my own business one year ago, and to say it was easy at first cause i had clients from the very beginning, but i learned things on the way and for learning doesn't make it any easier  .

-First having technical skills is good but a one man band is not that easy, don't fool your self with i will work hard, 1 year is enough to make you mentally and physically exhausted.

-Don't sell cheap, i did that as some ppl here said based on a wrong idea that things will grow up, they don't .few project (what a self working man can handle ) with not enough revenue to hire ppl for marketing or EE so you can free some time to do marketing yourself.it's an endless running.

-If you don't know the true value of the market for what you doing, my advice is to try to get a work in some small to medium company where this kind of informations are easier to get.

-This kind of business, you client is your best marketing agent, it's always a word of mouth. If you don't have the right ppl to help you doing that again get a job where you can meet ppl and build up your network.

-Getting new client is a pain in the ass, but most ppl appreciate the exclusive contact with them and that's a big advantage over big company, so when you get one it will probably stick with you for a long time ( as long as work is done) .

-You don't mention your country, but if it's one of those country where you have to fill 100 paper to get a 0.1$ transistor from mouser ( like the shit hole country i live in ) then think again before things get serious.

-Am not sure if asking ppl what they need so you go and develop it is the correct way. i been doing this all the time for a loooong loooong looooooooong time. try to build an idea, and use kickstarter to estimate ppl interest in it. i saw a lot of bullshit product in kickstarter, am sure now anything can be selled 

Good luck 

[Icarus]

Thank you very much for enlightening me.
But how do you discover niche market ? Audiophile market is filled with products, Fire detectors/alarms requires a lot of certification and filled with all kinds of things. In UPS/Power electronics, research is expensive and risky and price is very competitive. People don't care about efficiency but price. In LED lighting, money goes to LED manufacturer
What do you think ?

Do you have any areas of personal interest?

I don't have any hobby but electronics and embedded software. I've write some windows kernel filters for fun.

P.S: I've just look at Geller labs and I've also designed a fluxgate magnetometer with all parts: magnetic core, winding, analog conditioning, PC interface every thing.
It's a long shot but maybe I could sell ?
 

-You don't mention your country, but if it's one of those country where you have to fill 100 paper to get a 0.1$ transistor from mouser ( like the shit hole country i live in ) then think again before things get serious.
Good luck 

I'm in Turkey (like the bird) and there is almost no R&D cooperation.

[free_electron]

test equipment, standards/reference... for the measurebators, doing it everyday

Was just talking to David2 about this the other day.
Talking about a product idea that eventually tangented to something along the lines of a lab voltage reference standard. Much like that Geller guy:
http://www.gellerlabs.com/

He was kind of the defacto standard for cheap lab reference standards, but he decided to shut down.
Bingo, a niche has just opened.

I argued with David2 that it might not be worthwhile financially if you did it properly (e.g. test, burn in, and characterise each unit), but I didn't run the numbers, that was just a gut feel.

i think the rise of the chinese ebay references killed him... there's a dude in taiwan that has three 3485 and he builkds really nice reference modules in a nice acrylic case, lithium ion cell , chargeable thru usb and all...

[Spikee]

The geller stuff was a bit basic:


It seems like you have to add your own power supply?
A competitor had a 9v block battery socket on the bottom of the pcb. Which raised it a bit and made working with it nicer.

Had he made it a bit nicer with some kind of enclosure (plastic or alu or even custom alu milled) , some kind of burn-in service? , some kind of calibration "certificate" he might have been able to have something that his competitors did not have at that price point. Thus seizing a bigger market share for himself.
Also some kind of marketing might be needed to survive in such market.
--
The pro over the china product would be
- "trusted" component sourcing
- EU / USA quality assurance
- faster and possible cheaper shipping
- possible better build quality and consistency
- possible better documentation
- possible burn-in service
- possible better service
- possible better "calibration" sheet / proceedings
- possible re-calibration service

So there is a lot of room how it could be improved.
But I would not base a company one one niche product , I would do multiple websites / business selling one or a few niche products.

One tip for looking for a niche is look at hobbies. Many hobbies cost 1K to a few thousand dollars.
Look at RC / FPV / UAV , to build a decent custom one you are over the 1K mark fast. Make one or more products that solve a problem for this market and you have one a reasonable market to sell to and two almost to none competitors for months to multiple years selling reasonable margin devices.

Photography , camping (solar , charging , portable battery) , E-bikes (custom motor controller? , battery management system) , aquariums (monitoring , telemetry gsm , wifi ...) , design some measurement / data-logging device for the education / scientific market, make stuff for pets (animal tracking) , some kind of automation device for some market ....

So many markets to get in to... I would just pick a few , spread the "risk" and make your workflow so that as little time as possible goes into these businesses. When you have a regular stream of orders let students / kids pack and ship the orders. This gives you more time to do useful things. Make good documentation (manual, videos?) , FAQ's so you are not spending much time answering "dumb" questions.

In the meantime you could do some contracting if there is not enough sales revenue to pay your reasonably needed salary.

For contracting clients like if your are like a one-stop shop:
- Design schematics, Design pcb's
- Assemble prototype pcb's for clients
- Do some capacity of 3d CAD for cases or whatever (you may not need to use it, but they like it that you can)
- Know something about manufacturing techniques: 3d printing, laser cutting cnc milling
- Being able to do small 3dprinting , laser cutting and cnc jobs. These machines are pretty cheap these day in age. If you can't pay for them yourself than try to find a hackerspace or fablab in the area where you can do it.
- Being able to do embedded programming in a semi-professional capability
  QT / VB / C# / .NET programming for GUI's and Some C , C++ programming for embedded programming. Having a reasonable base for programming is a plus. When you have that than it is not too hard to make something in a language that you have not used before without to much start up time.
Having experience with linux is also a plus (command line, scripts , making / compiling / executing a program).

Build your portfolio , raise your hourly price when you get more experience and have more jobs in you portfolio. EU / USA companies are willing to pay reasonable wages (30 - 80$ /hr) depending on the work and skills you have. Only do jobs that will end well , are you not sure that you can do it than It would be wise not to do it. 
Once a you have a few companies that like your work you will most likely have they as a long time customer providing a steady stream of work part- to full-time.

Keep your overhead low. Accounting for small companies is around 500 euro a year here and than they do all the work for you. The only thing that you have to do is send them the invoices and check their work once a quarter.

Try to do as much mechanical prototyping in house. An A4 Mylar stencil might cost you 25 euro delivered. And you might need 10-20-30 a year for proto work for customers. Why not buy that laser cutter machine for 1000-1600 euro and do them yourself. Now you have the ability to laser cut cases / windows / engraving (service) and you have the ability to make your own stencils which saves you money in the long term. It also offers more flexibility.

A low end pnp like the liteplacer is ~1000 euro.
It does a reasonable job and requires short setup time when the workflow is set up properly. Now you can offer a service for your clients by assembling board for them in the 0-20QTY range without you spending all those hours doing it by hand. Let the machine do most of the work and just check on it.
(And no you may not make it a in house pick and place discussion  )

Same for 3d printing and cnc milling.
--

Focus your portfolio on the job demand. Look at which jobs clients have open (online on UpWork or whatever) and try to do some personal projects to put in your portfolio regarding those things.

Some "Hot" things:
- IOT (wifi , Bluetooth, m2m ...)
- Wearable (screen? , Bluetooth LE , battery management)
- Arduino / BBB / Pi shields
- Automation (telemetry 3G/4G , WIFI , Bluetooth ....)
- Energy Harvesting (got a job because I had it in my portfolio)
- low / med / high power rf designs (look at TI)
- Motor control (UAV market , 3 phase motor control (ESC's))
- Portable battery solutions (lots of those custom solar battery things)
- Portable GPS tracking devices
....

Now enough typing , lets see what the reactions are.
 

[IanB]

On the Geller voltage references, there was a fatal flaw. I would have bought one in an instant, but there was no "buy" button on his web site, no place to enter your credit card details in exchange for merchandise. That meant I never got to own one. I wonder how many sales were lost to that basic failure of marketing?

The golden rule of sales is to make it easy for the customer to hand over their money. It doesn't matter how good your product is, if you don't close the sale right there and then when the customer has an interest then you are losing revenue. As soon as you let the customer walk away without buying the deal will go cold.

[Icarus]

Thank you for mind opening advices, I'm going to make a research all of those fields.

[wagon]

On the Geller voltage references, there was a fatal flaw. I would have bought one in an instant, but there was no "buy" button on his web site, no place to enter your credit card details in exchange for merchandise. That meant I never got to own one. I wonder how many sales were lost to that basic failure of marketing?

The golden rule of sales is to make it easy for the customer to hand over their money. It doesn't matter how good your product is, if you don't close the sale right there and then when the customer has an interest then you are losing revenue. As soon as you let the customer walk away without buying the deal will go cold.

I walked away from a sale for the same reason.  It was only a simple product, should have been low cost, but there was no facility for me to buy it, so I didn't.

[nctnico]

Try to do as much mechanical prototyping in house. An A4 Mylar stencil might cost you 25 euro delivered. And you might need 10-20-30 a year for proto work for customers. Why not buy that laser cutter machine for 1000-1600 euro and do them yourself. Now you have the ability to laser cut cases / windows / engraving (service) and you have the ability to make your own stencils which saves you money in the long term. It also offers more flexibility.

A low end pnp like the liteplacer is ~1000 euro.
It does a reasonable job and requires short setup time when the workflow is set up properly. Now you can offer a service for your clients by assembling board for them in the 0-20QTY range without you spending all those hours doing it by hand. Let the machine do most of the work and just check on it.
(And no you may not make it a in house pick and place discussion  )

It's better and cheaper to outsource even small runs. You don't have to invest in that much hardware AND make money while doing other things! The more you outsource the more time you have for things that make more money. Every now and then I do some mechanical stuff for one offs but if it becomes a lot of work I outsource it. Doing everything yourself may seem like a good idea but it isn't. You have to keep a close eye on spending your time in a way it is most benificial in the long run.

[EEVblog]

But I would not base a company one one niche product , I would do multiple websites / business selling one or a few niche products.

Of course not, but you have to start somewhere and get a name for your self and customer base. You can do that with just one good product.

[Psi]

Yes, IanB is right on.
You need to make it easy to buy the product.

Luckily that isn't hard. You can create a paypal account and then use their system to generate a webcode snippet that you can slap into any dirt simple html webpage and it shows a paypal buy button.
Anyone clicking it is directed to paypal to buy your item using their CC or paypal account.
And you get an email with the details they entered for shipping.

Of course, a pretty dynamic webpage is better than a static html page with a single buy button.
But when you're starting out and building everything yourself keeping it simple helps save time for more important things.
(I think paypal also offer a similar 'code snippet' system to add an entire shopping cart system to any webpage. but ive not used it.)


Picking the right industry is also key. You need to have some good knowledge in the area, or at least have a business partner that does.

Trying to sell something in an industry you don't know much about is very hard. (Even when the product works well and is needed by the industry). If you have a product idea and have no option but selling something in an industry you don't know it's best to team up with someone who does and sell your items through them. 
Eg, if you had an automotive idea you might try and sell your product through your a local automotive shop. The shop can charge for installation etc. and you get free promotion into the market because word quickly spreads through people in the industry.
Don't be surprised if they shoot down your idea as being stupid but always then ask what electronic product *they* think are needed in the industry. People always have ideas for things that they want but have no idea how to build themselves.

You also want an industry where there's lots of people with money to impulse buy. Good markets are ones where there's lots of people wanting to buy your product for many different reasons. Maybe they want it for status or because it just sounds fancy or because its got better features than the competition and this matters to them more than actually using your product for it's function. This is where you get the "shut up and take my money" customers