Wednesday, March 07, 2012

A New Age of Business and Manufacturing

We're entering an age where anyone with a good idea and some marketing savvy can their product made and business off the ground nearly overnight. Kickstarter, for one, has helped some amazing products go from idea to reality in under a year.

The common problem I've been seeing is not been exposure for these new companies and products, it has been scaling to meet the demand. Interest in a new product or company can go from zero to pandemonium in a matter of days or even hours. In the last week, alone I've seen this happen twice.

Raspberry Pi, is a small DIY computer similar to Arduino, but designed and marketed toward a different user base. Instead of interest building gradually like the Arduino, it exploded as soon as a finished product was announced, due to incredibly affordable pricing. At $35, everyone wants a piece of the action.

Dollar Shave Club recently announced their new monthly shaving supply service, complete with a funny video designed to go viral.



The problem is, I'm interested in both, but I can't get either. The initial lot of a few thousand Raspberry Pi boards sold out in a few hours, and the Dollar Shave Club video's "viralness" has guaranteed an unusable website for now, maybe even for a few more days. It is unfortunate to succeed so completely in generating interest and sales, but then be unable to fulfill them.

I'm no expert in sales and marketing, but I'm sure there is a sizable chunk of spontaneous purchases lost forever when the product isn't available for purchase at the height of its viral popularity. I suspect that a large number of sales of these products depend on the fact that it is popular. Half the reason people are buying is for the right to say "I was one of the first", or "I've been a _____ user since day one". There is definitely a perception of cool when you are the first person you know with the new gadget or service everyone is talking about.

From what I've seen, the ability to rapidly scale upwards is available, but business need to take advantage of it. For manufacturing, companies turn to China to do anything quickly. That's why the Raspberry Pi isn't made anywhere else. For services that rely on a website to do business, there are hosting services that will allow you to ramp up resources dynamically as you need them, and only pay for what you use.

In other words, small startups can plan for success without spending a ton of money up front.

I've made myself some reminders to check out Raspberry Pi and Dollar Shave Club again when they might be available, but I'm not sure I'll still want them then. By then, some new hot ideas might have my attention instead.


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