We’re back for a second edition of our favorite books for hardware product makers. Given that the first version of this article was well received, this post is a natural follow up.

Overview

1. Steve Jobs

2. Invention: A Life of Learning Through Failure

3. Nudge

4. AI for Robotics

5. The Technological Society

1. Steve Jobs

By Walter Isaacson

Great product makers need to be able to synthesize multiple fields. Hardware, software, engineering, design, art, communication, sales, manufacturing, and much more. In my humble opinion, one of the best examples of this in the last 50 years was Steve Jobs. He said:

“Technology alone is not enough. It is technology married with liberal arts, married with the humanities, that yields us the results that make our hearts sing.”

He understood that art and science have to work together to make brilliant products. That’s why a MacBook feels so much more intuitive, more beautiful, than a Dell laptop. Both companies have brilliant engineers. Both companies have massive R&D spend. But it’s not just about the technology. It’s about marrying that technology with a deep understanding of human psychology and culture.

As human beings, we don’t make purchasing decisions based solely on rational aspects like the best specs. There’s an emotional element to our decision making. A quote near the end of the book encapsulates this well:

“Leonardo da Vinci was a hero and role model for Jobs…their creative genius both sprang from the same lesson: stand at the intersection of art and science. In fact, they both understood something even deeper: make no distinction between art and science.”

You can see the theme of storytelling with both art and technology across multiple fields in Jobs’ career. Let’s not forget that he started Apple and Pixar in one lifetime.

We often see that Apple products look as beautiful on the inside as they do out. But an example of this at Pixar was when they intentionally chose toys, not people, in their films. Rendering systems in the 90s were good with hard, geometric surfaces but not with organic tissue. Hence, toys were selected to create an emotional connection with viewers.

Another aspect I enjoyed reading about was his focus on retail stores. Because there’s no fancy product design or engineering with retail experiences, many people would’ve disregarded them. But the end to end user experience matters. From the first time a customer sees your device in an advertisement, to how it feels when they walk into a store. Every part of this customer journey is a reflection of your craft.

In the early 2000s, Jobs was tired of seeing Macs gathering dust in the back of cluttered big box retailers with uninspired associates selling them the same way as HP computers. Apple products were a work of art, and they needed their own purchase experience.

To solve this, Jobs decided to move Apple into high traffic malls. He obsessed over every detail, from the specific Italian sandstone used for the floors to the creation of the Genius Bar, which he modeled after a high end hotel concierge to provide expert, face to face support. An interesting part of the strategy was Jobs’ insistence on a single entrance, in opposition to multi door models used by established retailers like Eddie Bauer. He wanted to curate the customer’s first impression.

Eventually these changes helped Apple Stores achieve the highest revenue per square foot of any retailer in the world.

2. Invention: A Life of Learning Through Failure🧑‍🎨

By James Dyson

Continuing with the theme of artists becoming product makers, we have to talk about James Dyson.

Dyson’s persistence is fascinating as we learn that he built 5127 prototypes of his cyclonic vacuum by making one change at a time. His focused, thoughtful iteration was pretty refreshing to read about in today’s age of vibe coding.

However, his story is also a great reminder that even the best can get it wrong sometimes. In this newsletter, I often highlight how a good hardware product needs 3 things. It has to be compelling to users, technically feasible, and business viable.

Hence it was interesting to learn about why their electric vehicle failed. Was the car desirable to users? Yes, they had the longest advertised range of any EV SUV at the time (600+ miles). Was it technically feasible? Again yes. After spending years on vertically integrating battery, motors, and filtration R&D, Dyson was theoretically well positioned as an engineering company.

But they weren’t viable from a business PoV. Automotive companies typically net a 3-5% margin, whereas consumer electronics makers are usually around ~30-40%. Unsurprisingly, this is where Dyson fell short. He talks about how their suppliers were charging them 25% premiums given they were a new player in the automotive space. This led to the car costing around $200K for customers, making it not commercially feasible.

3. Nudge ⚙️

By Richard Thaler and Cass Sunstein

As physical product makers, we have more to do with behavioral science than we realize. Think of every decision on the products you’ve made. Every texture, button placement, color, shape, and configuration tells the user a story about how they’re supposed to interact with it.

Behavioural science is exactly what Richard Thaler and Cass Sunshine discuss in Nudge. From this book, I want to focus on their concept of choice architecture, the idea that the way choices are presented to people alters their behaviour.

“Small and apparently insignificant details can have major impact on people’s behavior. A good rule of thumb is to assume that ‘everything matters.”

“A choice architect has the responsibility for organizing the context in which people make decisions... A crucial parallel is that there is no such thing as a ‘neutral’ design.”

“Good design is no more expensive than bad design.”

To illustrate the impact of bad design, Thaler talks about sludge, or friction. The book gives an example of stoves. Some stoves (left) have burners symmetrically and vertically arranged, but their controllers are horizontal and linear. This could confuse users and result in burned food. A better design is on the right.

Think of all the friction points that create bad user experiences and how we solve them in everyday devices. For example:

1. Auto provisioning - Instead of manually typing Wi-Fi passwords, we can use BLE for faster pairing and automatic credential sharing. Apple does this really well.

2. Out of Box Readiness - Shipping a device with the battery preinstalled and charged makes setup easier.

At a deeper level, as product makers and choice architects, we also can encourage healthy behaviors with our designs. We can "Nudge” people towards preferred actions.

“The basic principle of choice architecture is, ‘if you want to encourage some action or activity, Make It Easy’.”

Some unhealthy Nudges are:

1. Netflix logos on TV remotes that bypass menu screens and encourage binge watching.

2. Notifications appearing on lock screens that distract people during real conversations.

Some healthy Nudges are:

1. Physical climate controls and volume knobs instead of touch screen menus to encourage drivers to keep their eyes on the road.

2. Physical silent/mute/action buttons on smartwatches and phones to bypass screen usage.

4. AI for Robotics: Toward Embodied and General Intelligence in the Physical World

By Alishba Imran, Keerthana Gopalakrishnan

Physical AI is already here. There’s a lot of content about upstream AI hardware like chip making, but those discussions may be too abstract for consumer hardware folks. Those topics don’t focus enough on how that technology can be leveraged for user experiences.

Also consider that AI hardware isn’t just about Humanoids and self driving cars. It’s broader than that and is already in devices like smart home products, wearables, and phones.

For many who are not familiar with the space, it can be overwhelming to understand terms. This book is a good entry level read for product managers, designers, investors, and even engineers to understand how the fundamentals work together.

If you’ve found yourself to be confused on concepts like “edge processing”, “computer vision”, “sensor fusion”, “context”, “classification”, and how all of these can be synthesized in the physical world, this book can be a starting point.

5. The Technological Society

By Jacques Ellul

There is no question that technology is useful. However, as someone who has built devices for millions as a part of “secret project" teams in Silicon Valley, I often question whether certain product decisions were right, or good.

New technologies have significant societal impact. Screen addiction and isolation are just a couple of examples that make us wonder if we are developing the right interfaces for our kids, families, and communities.

This is where Jacques Ellul comes in. He was a philosopher of technology who commented on similar trends 70 years ago in The Technological Society. There are two concepts I want to focus on.

1. The Trap of Technique

Ellul defined “technique” as the totality of methods rationally arrived at to achieve efficiency in every field of human activity. He argues that when society prioritizes efficiency above all else, it may subordinate human values to the logic of the machine. In other words, the relentless pursuit of maximum efficiency prioritizes the how over the why. People, whether they are builders or users, get reduced to components within a larger apparatus.

2. The Myth of Neutrality

How many times have we heard that technology is neutral? It’s just a tool. It depends on how people use it. Sure, in some instances this is true. But Ellul cuts through this corporate talk by arguing that once a technical system reaches a certain level of maturity, it forces us to confront harsh realities.

Think of how some AI companies use technology to exploit creative data, outsource cognition, create environmental damage, and, worst of all, disregard the sanctity of human life by pursuing uncontrolled military operations.

Autonomous weapons making arbirtrary life or death decisions to murder innocent civilians is not something to be neutral about.

As creatives, our strength is in our ability to challenge the status quo. I’m sure we did not become product makers for someone (whether it’s a large organization or the next technology trend) to tell us how to think. Creatives have a responsibility to deeply consider societal implications when building new technologies.

🤔Interested in learning 0-1 HW Product Management?

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Make sure you check out some other articles:

• Hardware Strategy Blueprint 🤔

• Financial Model for Physical Products 💰

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• HW Product Requirements Document 🔥

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I got the chance to talk with a fellow HW product manager and Substack author. Adesh is a 0-1 product leader in the renewable energy, HW/SW integration, and AI workflow spaces.

As software gets saturated by AI, companies are rapidly moving towards the physical world for differentiation. I enjoyed talking to Adesh because he embodies the next wave of builders.

We discussed how the future will belong to generalists who, while they do possess domain expertise, have the ability to orchestrate multiple, broad fields.

A great example is in the energy space, which is moving towards an intelligent, decentralized infrastructure. We also uncovered some career tips and product development frameworks. Enjoy!

Check out Adesh’s work here 👇

• Simplergy substack

• Linkedin

🎤 Interview with Adesh

1. Can you talk to us about your background?

I’m a product and systems thinker who has spent the last eight years figuring out how to make hardware, software, and AI play nice together in the energy sector.

My career has been defined by the 0 to 1 journey of industrial energy products. I’ve led the lifecycle of everything from commercial energy storage systems and microgrids to energy management platforms. Currently, I’m at Palmetto, where we’re working to accelerate the transition to sustainable energy for homeowners.

We’ve spent decades building energy as linear infrastructure, but we’re moving toward a world where energy is an interactive, decentralized platform. My job is to bridge that gap by taking complex, heavy engineering and turning it into a seamless, go-to-market product strategy.

Because I’m a builder at heart, my weekend projects usually look a lot like my day job. I run Simplergy, a newsletter where I break down complex energy tech for other operators into simply easy to understand language. Most recently, I launched EquipDB, which is a free, open source database for the BESS (Battery Energy Storage) industry. I built it (with the help of an AI agent named Remo) specifically to solve the ‘PDF datasheet nightmare’ that every hardware engineer knows all too well.

I’m driven by the belief that the next decade of innovation won’t just happen in the cloud, it’s going to happen in the physical world, powered by smarter, cleaner infrastructure.

2. What was your favorite product to work on and why?

If I had to pick one, it would definitely be building Energy Management Systems (EMS). It’s an IoT product at its core. The brain that monitors, controls, and optimizes a complex mix of inverters, batteries, and EV chargers.

I’ve always been fascinated by the Nest or Tesla Powerwall effect, how a single, well designed piece of hardware can suddenly unlock massive utility for everyone, from the homeowner to the after sales service team. Working on EMS was my deep dive into that world of HW-SW integration.

The most rewarding part wasn’t just the high level orchestration, though. It was the intricacy of the firmware development. There’s a unique kind of satisfaction in solving the low level communication hurdles between a battery and a charger, knowing that those technical wins directly translate into a more resilient grid and a better experience for the end user. It’s where the abstract goal of ‘electrification’ becomes a physical reality you can actually measure.

3. You’ve done both HW and SW product management. What are some differences?

I’ve found that the definition of Product Management changes depending on the ‘gravity’ of the product. PMing for a pure play software company is a different beast than PMing for a service company enabled by hardware. While there are overlaps, three core differences define the hardware experience:

Regulation: In software, you’re often limited only by your imagination and the tech stack. In hardware, regulation drives the roadmap. Being deeply knowledgeable about codes, standards, and UL certifications is a necessity. Every decision we make is tethered to supply chain dependencies and safety standards that simply don’t exist in the unregulated world of software.

Iteration Cycle: In hardware, the undo button is incredibly expensive. The speed of development is naturally slower because every decision carries a high magnitude impact on the COGS (Cost of Goods Sold). You are working in a highly constrained environment with intense stakeholder dependencies. In software, you ship and iterate. In hardware, if you miss a requirement before the molds are cast, you might delay a launch by six months or more.

Domain Expertise: Building connected products requires a unique kind of polymath leadership. You’re managing a symphony of mechanical, electrical, firmware, and cloud engineering. As a PM, you have to speak all those languages fluently. A single missed detail in the firmware to hardware handoff can lead to a product that doesn’t meet industry standards or, worse, a complete production halt.

4. What are the challenges with HW product management?

At its core, the goal of a HW PM is to de risk high stakes decisions. You carry a high degree of ownership, but you have to balance that by ensuring total cross-functional alignment. In this role, stakeholders look to you for a definitive opinion. It’s not just about being right it’s about having the conviction to lead and the diplomacy to keep diverse teams moving toward the same goal.

The challenges also shift depending on the stage of the company. In an early-stage venture, your job is to bring clarity to chaos and define the product’s soul. In a later stage organization, the focus shifts to sustaining product lines and staying ahead of evolving market requirements. Ultimately, it’s a constant balancing act: managing expectations, staying obsessed with strategic priorities over mere execution, and maintaining a strong, real-time pulse on the market.

5. What are some helpful skills for HW PMs?

If you want to excel in hardware, you need a toolkit that can handle the ‘friction’ of the physical world. It’s a niche role that requires a very specific blend of technical grounding and strategic intuition. I’d boil it down to four essential pillars:

Bringing clarity to chaos: Hardware development is inherently messy. You’re managing shifting lead times, technical bottlenecks, and manufacturing constraints. Your primary job is to be calm in the storm and distilling all that noise into a clear, actionable path for your engineering and operations teams.

Pulse of the market: Because your iteration cycles are so long, you have to be a bit of a futurist. You aren’t just building for today’s market, you’re building for where the market will be in 18 to 24 months. If you lose your pulse on where the industry is heading, you risk shipping a product that is obsolete the day it arrives at the warehouse.

Domain Expertise: You don’t need to be the person writing the firmware or designing the PCB, but you must speak their language. You need enough ‘bits and atoms’ fluency to understand how a mechanical change impacts the electrical design or how a firmware tweak affects the end user experience.

Bias for action: In hardware, silence is expensive. If a problem arises on the factory floor or a certification is delayed, you can’t afford to wait. You need the bias for action to tackle the issue immediately.

6. What are some of your favorite product development frameworks?

I have learnt a ton of product development approaches from various experts like reading BH blogs, BUILD by Tony Fadell’s and few others. One of the frameworks that’s my favorite is by Daniel Elzalde from his book B2b innovators map. In it he provides a very structured way to approach a problem for IoT product development.

In addition to the above, the classic Phase Gate is one of the other frameworks that helps in ensuring a systematic approach to product development. Making sure all the stakeholders are aligned, no requirements have been skipped and de-risking the product at every stage.

7. How do you perform PMF and GTM activities in the B2B HW industry?

In the B2B hardware space, especially in energy and electrification, you find it through validation. Because our products are critical infrastructure, the GTM strategy is less about marketing and more about integration.

It’s a Beta to Reference model. You partner with 2–3 Alpha customers, early-adopting installers, or fleet managers and treat them as design partners. You’re ensuring your product plays nice with their existing workflows.

You can’t A/B test a physical inverter in the field. Instead, we validate PMF through :

• Technical Feasibility (The Lab): Can the hardware physically do what we claim?

• Operational Fit (The Pilot): Does it survive the ‘real world’? Does an installer find it intuitive, or does it add two hours to their job? If the field crew hates it, you don’t have PMF.

• Economic Validation (The ROI): This is the ultimate test. In B2B energy, PMF is achieved when the customer’s LCOE (Levelized Cost of Energy) or operational savings clearly outweigh the hardware’s Total Cost of Ownership.

In energy tech, no product is an island. PMF is often dictated by Interoperability. If your hardware doesn’t integrate with the utility’s software or building energy management system, the market won’t adopt it. We validate this by ensuring our API and firmware support the symphony of devices already on-site.

GTM varies for B2B vs B2C products, as in the energy space, you have to design products considering an installer, homeowner, facilities manager, utility company, or a field service technician. So ensuring there’s a strong understanding of the distributor’s network and aligning with their goals becomes the most critical path.

8. You’ve talked about the new energy landscape. What is that and why is it important?

For over a century, the blueprint of our electricity system hasn’t fundamentally changed. We’ve relied on a centralized model, massive power plants sending electrons one way across thousands of miles of poles and cables. It was a 20th-century solution that is now colliding with the 21st century reality.

Between the total digitalization of our economy and the aggressive electrification of transport and heat, we are putting a tremendous stress on a grid that was never designed for this load. To put it in perspective, global electricity demand is projected to rise by nearly 3.4% annually through 2026, yet in many developed regions, the wait time for new grid interconnections has ballooned to over 2 years. We are trying to run a high speed digital economy on an analog backbone, and the inefficiency is becoming expensive, especially as AI makes energy costs a primary competitive metric.

I believe we are witnessing the birth of a new energy landscape. We are moving away from total central dependence toward a world of Distributed Energy Resources (DERs). Every home and business is becoming a micro power plant, equipped with solar, batteries, heat pumps, and EV chargers. These aren’t just appliances anymore. They are interconnected assets that allow for energy independence, lower bills, and a smaller carbon footprint.

For developing nations, this is even more critical. It’s a path to escape the volatility of oil imports and geopolitical instability. By building local, renewable capacity, these nations can bypass the centralized stage entirely, much like they skipped landlines for mobile phones.

9. What is the full stack energy model?

The Full Stack Energy Model represents a shift from a linear, centralized infrastructure to an integrated, software driven platform. While traditional energy models focus on moving electrons from point A to point B, the full stack model focuses on orchestrating those electrons through a combination of generation, retail, and technology. Traditional models generated revenue based on consumption (selling more kWh) where as the full stack model generates revenue based on optimization and energy as a service.

Key components include:

Vertical Integration: Companies like Fuse Energy or Octopus Energy collapse the value chain. They don’t just resell power, they own the “studio” (renewable generation), the distribution (the app), and the recommendation engine (AI trading).

Distributed Energy Resources (DERs): The model relies on a decentralized network of hardware, including solar panels, EV chargers, and residential batteries. These assets allow the customer to become a “prosumer” both consuming and producing power.

The Software Layer: This is the “brain” of the stack. It uses AI to manage gigawatts of individual devices, balancing the grid in real time. This turns thousands of homes into a Virtual Power Plant (VPP) that can rival the output of a traditional gas plant.

10. You’ve talked about virtual power plants. Can you elaborate?

Think of a Virtual Power Plant (VPP) as a digital symphony of hardware. It’s an aggregation of smart, distributed devices like batteries, heat pumps, and water heaters that can collectively act with the capacity of a traditional power plant.

Take a home battery, for example. It often sits with unused capacity for large portions of the day. A VPP extracts that underutilized energy and directs it back to the grid during peak events, like a heatwave in the summer when electricity demand is at its highest.

By calling on these distributed assets, utilities can balance the grid in real time without spending billions on new infrastructure upgrades. In exchange, the utility incentivizes the battery owners, which significantly reduces the Total Cost of Ownership for the homeowner. It’s a win win, the grid stays resilient, and the prosumer turns their hardware into a revenue generating asset.

11. People have concerns about AI’s impact on the environment and energy. How are product makers addressing this?

Energy has emerged as a primary bottleneck for AI deployment as the industry pivots from model training to inference. The massive compute requirements translate directly into higher energy intensity per operation, making power consumption a critical factor in data center economics alongside hardware costs. Because current grids are not equipped for this surge, energy is now a major value chain constraint; a single facility can consume as much power as thousands of U.S. homes. While the ultimate goal remains 100% renewable power, meeting current timelines and economic demands requires a strategic mix of various energy assets.

To optimize the levelized cost of electricity, these data centers utilize Uninterrupted Power Systems (UPS), advanced cooling, solar panels, and energy storage. However, infrastructure challenges remain; obtaining electrical permits can take 12 to 18 months, or even longer, depending on the region. With demand effectively guaranteed, OEMs are now prioritizing high quality production and shorter lead times to combat historic delays, such as the 128 week wait for large power transformers.

Product leaders are adopting cross industry techniques to solve these challenges, such as battery manufacturers implementing automotive development processes to ensure quality. By applying first principles thinking and a user centric approach, they are reinventing how this critical hardware is brought to market.

12. Where do you see the biggest changes with clean tech and energy in the age of physical AI?

One of the biggest shift is moving beyond just simple monitoring to autonomous decision making. Traditional smart grids tells when something is wrong and provide predictive intelligence, whereas Physical AI fixes the issue in real time without human intervention. We will see AI agents managing microgrids - making autonomous decisions and this will enable managing the renewable energy assets smartly. We are moving from predictive analytics to active orchestration of physical assets.

Another area is filing up deployment gap, where we have technology for clean energy but the installation process is complex and time consuming or we do not have labor. Imagine using autonomous robots to deploy solar panels on a roof or in large land to build solar farms.

Its never been a better time to connect bits and atoms. Bits dominated the last few decades and now with convergence of AI x compute x embedded systems its been an incredible time to building autonomous infrastructure at scale.

13. How can people break into HW product management?

To be honest, I didn’t set out to be a Hardware PM, I chased my curiosity and, in many ways, I got lucky. I’ve realized that there isn’t a standard training manual for this role because HW PMing is more art than science. It requires a specific blend of taste, judgment, and deep expertise that you can only really develop by being in the trenches.

For me, domain knowledge enabled me to get into the HW PM path. I have spent most of career in the renewable energy field, which gave me holistic knowledge about the industry, customers, different technologies. To break into this space, you either need to have strong domain knowledge or have the ability to learn quickly. Additionally having knowledge about operations or supply chain can be helpful. Make sure you understand lead times and COGS.

Ultimately, HW PMing is different based on the type of company you’re targeting, for eg: HW PM at Tesla will be different compared to PG&E. Other tips are to build a physical product portfolio by doing side projects, joining early stage startups, or working with design teams.

14. What would you tell our readers about navigating today’s tech job market?

One of the books that shaped up my thinking about approaching a job or even if you’re an entrepreneur is The Startup of You by Reid Hoffman. Overall I’d focus on four areas.

Full Stack PM : In todays world with knowledge becoming available so easily across any domains, for anyone to succeed, they need to have a full stack approach. Don’t be narrowly focused, but rather have a broader and more holistic attitude while problem solving.

Be curious: Read, write, and meet with people in your space. You learn alot over time by simply asking questions.

Think long term: Your career is a marathon, not a sprint. Find the right set of people to work with for sustained growth.

Be valuable: Add value before seeking help. Attend events, post online, share insights about your space, and build in your spare team. Think of yourself as a startup and opportunities will find you.

For more tips, follow Adesh’s work here 👇

• Simplergy substack

• Linkedin

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

Join the Waitlist

🙏Thanks for reading

Make sure you check out some other articles:

• Hardware Strategy Blueprint 🤔

• Financial Model for Physical Products 💰

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

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Subscribe now

What if I told you that there is a pattern that Apple, Tesla, and Google Nest use to make iconic products? Three companies, three different industries, yet their long term template is generally the same.

Today we’ll dive into lessons from their product strategy based on Tony Fadell’s approach to building compelling businesses. We will be referencing Build, one of the books from our 📚recommended reading article for HW builders.

V1 Products: Vision

According to Fadell, the first version of the product (V1) reflects the grand vision. It has to be disruptive and may need to sacrifice profitability to test the market’s reaction to a new idea. V1s need to focus on a core hypothesis, given that there is no customer data to rely on.

Product

These products need to retain a core set of features that are vital to the company’s philosophy. Nice to have features are usually considered scope creep. They get removed because they add unnecessary complexity. Because market feedback is so limited, leaders can shine by proceeding in ambiguity. This is where product sense comes in, the ability to make correct assumptions based on a limited data set. However, as we’ve learned with Humane and the rabbit r1, first gen isn’t an excuse for low quality.

Users

V1 products are for early adopters. These are users who are opinionated, passionate, and can hack their own solutions if needed. They either have an emotional connection with the product space or are tech enthusiasts. Building for their needs can foreshadow larger market trends. They are more forgiving of early bugs but will become pickier as the product matures.

Tech

Fadell states that V1 products have a limited amount of innovation capital. For this reason, reference modules and designs should be used where possible. Practically, this means using off-the-shelf displays, batteries, PCBs, and sensors, instead of re-inventing the wheel for each component. Since V1s have lower volumes, budgets should be strategically used on innovating core user experiences. This means to only design custom technology for a limited set of key features.

Business

These products sell at lower volumes and higher MSRPs. Customer acquisition costs are substantial, while marketing and sales processes are raw. Teams should focus on product market fit, instead of profitability at V1. Given the poor economics, a lot of companies also die at this stage.

Teams

Development teams need to be lean, given the obvious resourcing constraints. Most of the execution is contracted or outsourced at this stage. But also, because having more people leads to designing by consensus, and this prevents opinionated designs from being executed. This dilutes the original product vision. Remember, V1s are about trying to validate taste or disruptive bets.

Examples

The Tesla Roadster was a low volume, high priced V1 built on a Lotus chassis to save innovation capital for the powertrain. It targeted wealthy environmental and tech enthusiasts to prove that an electric car could be compelling.

Nest’s first thermostat disrupted a boring utility industry. It proved that managing home comfort could be done with an elegant design. Their tech stack focused on learning habits of niche users to reduce energy costs.

The first iPod challenged the industry. It proved that portable media consumption could be a seamless experience with the famous “1000 songs in your pocket” messaging. It came with a physical scroll wheel and was a high priced, exclusive (Mac users) device for early adopters. It used a Toshiba hard drive and outsourced OS development to PortalPlayer.

V2 Products: Refinement

V2 products improve upon V1 based on user feedback. Core elements are maintained while weaknesses are addressed. Unit economics are improved, but overall profitability is still a work in progress.

Product

This is where the product vision moves from ambiguity to clarity. Product leaders can now make data driven decisions instead of relying on assumptions. For this reason, V2s represent an evolved product feature set, while retaining key elements of the brand’s DNA. For example, despite optimizations over the years, each generation of the iPod kept the navigation wheel. Similarly, future Nest thermostats maintained their circular shape.

Users

V2 products shift to the early majority user base, who gather opinions and reviews from early adopters. They are less forgiving of bugs and want an easier way to search for, purchase, and use the product. Given that companies at this stage have more paying customers, insights are more robust and teams know what problems to prioritize.

Tech

At this stage companies transition to designing for system stability and integration. The off-the-shelf modules from V1 are optimized to perform better, address user issues, and work more cohesively. Engineering may be able to fix size, power, assembly, and cost constraints that they couldn’t in V1. This is also where tech debt is usually addressed. This generation does however cause some frustration due to the fluidity of user feedback impacting a device’s technical architecture. Good leadership teams know when to lock scope and balance market trends.

Business

The product may reach gross profitability, but not by much. While COGs (see our HW financial model template) drop and volumes increase, they still may not be enough to outweigh marketing, acquisition, and technology costs.

Teams

For V2s, companies try to take the outsourced teams from V1 and bring that expertise within the organization. V2s require bringing in core competencies such as engineering, QA, and customer support because of the higher volume of feedback.

Examples

The Tesla Model S was developed using in house manufacturing and engineering. It transitioned the company into providing a premium sedan for early majority users while addressing weaknesses from the Roadster.

The V2 Nest addressed market feedback regarding bulkiness by making it 20% thinner. They also expanded HVAC compatibility, added premium materials, and fixed corner case wiring issues plaguing early adopters from V1.

The next couple of iPod generations moved to a touch wheel instead of the mechanical scroll wheel. They expanded storage, varying from 10GB to 40GB, and came with a dock connector. This made the device platform agnostic, growing the market to non Apple users.

V3 Products: Scale

V3 products are where net profit should finally be achieved at scale. Design, engineering, manufacturing, and business processes are stable through lessons from V1 and V2. Mainstream users now feel comfortable purchasing a proven product.

Product

The product should be doing well, and companies should shift their focus to enhance each aspect of the user experience value chain. This also means designing for the nice to haves such as more battery life and less weight. Organizations also spend more time thinking about the business as a whole, especially the ecosystem plays.

Users

V3 is for the majority. These mainstream users ask for the “faster, cheaper, and easier” versions of a product. They have no tolerance for bugs and will be quick to replace the product with whoever is the market leader.

Tech

At this stage, companies start investing in vertical integration and custom designs. For example, newer Apple products feature their own chips and higher end manufacturing techniques (unibody aluminum) that were too risky for a V1. From the outside, V3 may seem easier because of the increased market demand. However, it is important to note that scaling production lines is exponentially more difficult than making a low volume Gen 1 (more on that in our interview with a DFM expert here).

Business

At this stage, most companies may be able to achieve net vs gross margins. The business model should start to stabilize from the higher volumes, improved component pricing, new partnerships, and better distribution opportunities.

Teams

Internal teams inevitably grow and expertise is established. These teams support the core elements of a business, such as product, branding, engineering, and marketing. Some projects are still outsourced, but they will be smaller and less frequent.

Examples

The Model 3 helped transition Tesla to the mass auto market while achieving profitability. It was designed with vertical integration in mind and had to endure “manufacturing hell” during its production ramp up. The result is a product that dominates the North American mid-size sedan EV market.

The Gen 3 Nest thermostat reached a mainstream user base with a higher resolution display, enhanced connectivity, and optimized HVAC logic. They expanded into global markets and created a platform approach by scaling the “Works With Nest” smart home ecosystem.

The “V3” iPod, technically gen 4, came with a click wheel that reduced input complexity by moving all buttons onto a single touch surface. Battery life was increased and the MSRP was reduced, positioning the device as a product for the mass market.

Summary

Perhaps the best manifestation of the multi-generational product vision is a Steve Jobs video predicting the MacBook Air from the 1980s.

“We want to put an incredibly great computer in a book that you can carry around with you… we dont know how to do that right now. It is impossible technically…

…Right now it fits in a breadbox and it costs $10,000 and its called Lisa…

…The next thing we’ll do is put in a shoe box and sell it for $2500…

…and then finally we’ll find a way to get it in a book and set it for under $1000.”

The table below presents a summary of the various product making variables we’ve discussed in our article above.

What can we learn from this about making our own 0-1 devices?

Do we need to put every single feature and risk scope creep into a Gen 1? Should the Gen 1 be lower priced for market penetration? Or, should we focus resources on a tailored, niche, and disruptive experience first?

How can we learn from this approach the next time a Gen 1 product comes out?

Is Apple misguided by making a $3,500 mixed reality headset 👓? Is Tesla foolish by investing efforts in a $20,000+ rumored humanoid 🤖? Or are these companies just following their usual V1-V3 strategy? 🤔

Time will tell.

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

Join the Waitlist

Thanks for reading

Make sure you check out some other articles:

• Design for Manufacturing 🤖

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• HW Product Requirements Document 🔥

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What if I told you there was a hardware startup that achieved what Facebook and Amazon couldn’t? Today we’ll analyze how Nothing, a consumer electronics startup out of London, built a successful smartphone business.

I usually provide templates for holistically making physical products. We’ve talked about how to create requirements docs, financial models, delightful experiences, and more.

But over the past few months on Substack I’ve really enjoyed reading case studies from Lenny and Aakash about the growth stories of successful software businesses (Notion, Duolingo, more). In this new format, I’m going to attempt to do the same for hardware businesses. In today’s article we’ll be covering Nothing’s story around thier:

• Financials

• Founder’s Bio

• Company Journey

• Growth Levers

• Mistakes

Among the Fastest to $1B

I’ve selected Nothing as the first company in this series because, having been in consumer electronics, I can sympathize with the challenges of navigating manufacturing technologies, low margins, saturated markets, opinionated users, and unforgiving design constraints. After automotive, I believe it’s one of the riskiest industries to start a venture in.

Despite this Nothing has achieved a milestone that 0.1% - 0.3% of consumer hardware companies ever do, reaching a billion in lifetime sales.

On top of that, they’ve hit the milestone faster than most other HW startups in the last 20 years. It took Nothing approximately 4 years versus Ring, Peloton, and GoPro, which took between 6-10 years to accomplish the feat. Nothing trails only Xiaomi which took 2 years, probably due to the massive scale of Asian markets.

Product Market Fit (PMF)

While there isn’t a universal definition for PMF, it can be implied by a combination of variables. In general it’s a mix of positive feedback, predictable growth, stable retention, and strong loyalty.

For smartphone companies, let us use one million units of lifetime sales as a directional indicator. While this isn’t a definitive metric, it demonstrates sustainable demand and a significant enough volume to offset component costs with manufacturers.

Nothing has achieved this milestone in 2 years (phones plus audio). It then followed with rapid growth to 7 million units by the end of 2024.

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

Join the Waitlist

1. The Founder

We can’t start a deep dive without first understanding Carl Pei’s founder journey.

He was born in Beijing and raised in Sweden. Carl recounts being a technology enthusiast even in childhood since he was one of the first iPod and iPhone users in his country. Later he dropped out of the Stockholm School of Economics in 2011 to work at Nokia, Meizu, and then Oppo. At Oppo he led international expansion and introduced online first marketing, selling Chinese smartphones to global markets.

In 2013 at 24 years old, Pei and former Oppo VP Pete Lau teamed up to create OnePlus. He helped OnePlus become a household name, selling 1M units of their first phone, thanks in part to an invite only marketing strategy.

Although it’s not confirmed why he left OnePlus, some reports indicate the company’s culture started drifting from a scrappy startup ethos. Pei valued creative freedom, and in parallel, he noticed that consumer technology was stagnating. It was emotionally disconnected and lacked personality. There was no design or community driven approach. He wanted devices to feel fun again, and with that, Nothing was founded.

Nothing’s Story

Nothing was co-founded in stealth mode in late 2024 with $7M in seed funding, but the brand was officially launched in 2021. The Ear (1) wireless earbuds were Nothing’s debut product in July 2021. Their unique, transparent design and attractive price point immediately made them a fan favorite.

Then in 2022, Nothing launched their first smartphone, the Phone (1). This phone introduced Nothing’s signature glyph Interface and developed an almost cult like following. It was celebrated in the enthusiast space as a breath of fresh air and a device with actual utility at its price point.

Nothing secured a $70M series B round in 2023 and released the Phone (2). This helped move the brand further into the mid range segment with a powerful processor and refined industrial design.

In September, Nothing launched a sub-brand, CMF, to cater to budget focused users who still wanted value at entry level price points. This also helped them expand supply chain partnerships and mitigate operational risks.

The Nothing Phone 2a launched in March of 2024 and became one of their top selling devices. Building on this momentum, the company hit $1B in lifetime sales in December of 2024.

In 2025, Nothing faced controversy after launching its first Flagship, the Nothing Phone (3). Customers were frustrated that Nothing charged premium pricing for mid tier components (chips, displays, etc). We’ll cover this in more detail below.

From a funding PoV Nothing closed its latest series C2 round at $200M in September of last year. In 2026 there’s interest to see how Nothing will address the challenges of a growing but very particular user base, along with AI centric use cases.

Product Strategy Differentiators

I’ve been trying to understand which growth levers enabled Nothing to scale so rapidly and have come up with the following list.

1. Lower Risk Entry HW

Nothing’s first product wasn’t a phone. It was a pair of earbuds. This could be for a couple of reasons.

1. Nothing estimated that they would need to raise at least $100M to make a successful smartphone brand. This cost prohibition made it unfeasible to pursue the mobile phone space as a new entrant.

2. It was challenging to develop factory relationships and trust. Contract Manufacturers like Foxconn had lost significant capital in working with HW start-ups who failed to deliver on sales projections, leaving the CMs stuck with unsold inventory. This made suppliers increasingly skeptical of new players.

This is where earbuds came in. This product category would let them validate demand for their brand, creating a stronger financial portfolio when talking with investors or partners.

Earbuds also helped showcase their design and engineering capabilities. Audio products possess several hardware and software components that are adjacently used in phones, but at a slightly lower level of sophistication.

Most importantly, it would help them sell mass production level volumes and build trust with suppliers who would be willing to work with them later for larger programs, such as smartphones.

This seems like a good, general approach for hardware startups. A lot of times we want to make the first product a hero product, but fail to realize that several funding and supply chain constraints would make such endeavors unfeasible. Instead, it’s better to validate product market fit and use earnings to invest in future, more sophisticated devices.

2. Design as DNA

In a sea of sameness, competing on raw specs or technology against giants like Apple or Samsung is an unlikely battle that any startup would win. For this reason, Nothing uses design as a business strategy. It makes them stand out. Their design themes include nostalgia, transparency, and unique industrial forms. They draw on retro aesthetics and transparency, which reveals a sense of honesty by showing internal components. They synthesize a good mix of familiar and futuristic materials, shapes, and finishes.

However, there are many reviews criticizing misaligned cameras, lines, and textures. Maybe this is intentional, and it’s to appeal to their niche demographic, known for being creative, sometimes rebellious users who are frustrated with the homogeneous nature of the current tech scene. Either way, their fresh approach to design has worked.

I have also noticed how upfront they are with design as a part of their company’s culture. Just scrolling through Nothing’s YouTube channel, one comes across a series of videos going behind the scenes of their ideation process.

Their designers are public and are not afraid to talk about why a particular material was chosen, what the prototyping tools were, how the test fixtures functioned, and more. As a fan of industrial design and documenting the build process, I wish more companies would do this.

An example of using design not just for aesthetics and marketing, but also for functional problem solving is their glyph interface. People spend too much time on their screens. Nothing’s approach to solve this was to design a set of LEDs on the back of the phone that provide customizable notifications and interactive elements. You can use the glyphs as a battery status indicator, timer, calling aid, and more without turning on your screen.

3. Building for the Gap

Companies like Apple and Samsung invest their top resources in the premium phone range, leaving the mid and entry range phones neglected in a sense. The landscape is largely split between functional mid range devices, uninspiring entry range devices, and expensive flagships. This naturally creates a gap in the middle, where users want a better experience but are okay with some tradeoffs.

Nothing saw this market gap and succeeded by offering compelling design, quality materials, symmetrical bezels, and a clean software experience instead of the bloatware on most mid tier phones’ operating systems.

4. Users

As a quick refresher, there are generally two types of users. Mainstream users have needs that are well met by existing products and are satisfied with established designs. While they can help us understand the must have features for a product, catering to their needs isn’t the best way to establish a disruptive device. This is because they typically ask for “faster, cheaper, easer” versions of existing products.

Lead users on the other hand struggle with needs that will become more apparent in the future. They’re typically enthusiasts who sometimes hack and build their own solutions. For a startup, they are helpful because their needs can foreshadow the general market and they can help cut development time by implementing their workarounds. The risk is that they are very picky and can over constrain a product. More on that later.

For Nothing’s core series of products, the majority of their customers appear to be lead users. They are younger creatives (average user is 26 years old in contrast to Samsung’s average age of 45) who are value and identity-conscious tech enthusiasts. These lead users cultivated a community approach where close to 8,000 fans invested $8M in the company. They also helped design aspects of Nothing’s hardware and software through public ideation sessions.

For their mass market brand CMF, Nothing is focusing on the Indian user base to help drive volume and scale. In 2020 over ~90% of smartphones in India were Android compared to ~40% in the US. Given that it’s easier to convert an Android user, and that India has the second largest smartphone users in the world, this is a great growth opportunity for Nothing. According to Carl Pei, the energy in India feels similar to China in 2011 given that there’s a growing economy and an emerging middle class.

Designing products to be more appealing for larger markets outside of the US is a winning strategy, not just for startups. Even Apple reported a record breaking fiscal Q4 2026, with iPhone revenue soaring 23% YoY (one of the best quarters ever). The main driver? Tailoring the iPhone 17 base model for the Chinese market with more attractive features.

5. Founder Led Marketing

Nothing clearly doesn’t have the same marketing budget as its established competitors, yet their phone reviews and videos are always at the top of my socials. But maybe my algorithm is just biased. Aside from the obvious startup marketing strategies like community based referrals and focusing on emotions instead of specs, I wanted to touch on their founder led branding.

Carl Pei is everywhere online. You can find him on several podcasts breaking down exactly why a feature was picked, the constraints they were working with, behind the scenes narratives, and providing his personal takes on famous products.

He also does reaction videos to popular tech YouTubers who review Nothing devices. This almost brings a sense of authenticity, which helps with organic marketing and community building. I say almost, because not all user complaints are always addressed by him. Regardless, the ability to provide his takes, just as if he were one of us is refreshing.

6. Partnerships

Nothing has partnered with several well known names. From Audio with KEF, to creative imaging with Jordan Hemingway, to repairability with iFixit, to investment and publicity from Tony Fadell (iPod, Nest inventor). Two of the other partnerships I thought were interesting are with Teenage Engineering and Optimeus Infracom.

Teenage Engineering (TE)

One of Nothing’s founding partners was Teenage Engineering. They’re a Swedish design firm known for unique, aesthetically pleasing audio products. They have a cult like following and have an iconic design language. Their products have been pretty popular, like the OP-1 and pocket operators.

This partnership helped establish Nothing’s distinctive design language. Many of the tenets we talked about earlier, such as transparency and playful visuals were co-developed with TE, giving Nothing a competitive advantage and cultural credibility as a new brand.

Optiemus Infracom (OI)

OI is an Indian consumer electronics manufacturer with expertise in supply chain and assembly. Nothing formed a $100M joint venture in late 2025 to establish India as a global hub for production and consumer electronics R&D. In return, Nothing receives tools to scale in its largest market such as factory infrastructure, skilled production teams, advantageous production costs, and faster market feedback.

Mistakes

Overpromising and Underdelivering

Nothing set a high bar for their Flagship, the Phone (3). Fans were expecting a compelling device with great features at a bargain price. But what actually happened was that Nothing charged flagship prices for what doesn’t appear to be a premium phone under the hood.

It features a mid range chip (Snapdragon 8S Gen 4) which, while good, isn’t up to par with phones in the $800+ range. Similarly on the mechanicals, they implemented Gorilla Glass 7i, instead of the more durable Gorilla Glass Victus series. On the camera side, it has lower sharpness and overall quality than its competitors. Its display has worse power efficiency than true flagships such as the iPhone or Pixel.

All of these factors severely erode customer trust. Nothing has addressed the criticism, citing that they’ve cut back on using expensive components to invest more effort in design and experience. Carl Pei has referenced the constraints of being a startup, stating that they don’t have the volumes to compete with Samsung or Apple for component pricing. Which is fair, but to users that doesn’t matter.

Customers don’t care about a company’s financial concerns. To users, the most important thing is a reliable, trustworthy experience. In the words of Tony Fadell:

“Customers don’t care about what the product does. They care about what it does for them.”

Inconsistent Design and Identity

As we discussed above, Nothing’s glyph interface was a big hit. They created a unique brand identity and provided utility. But the Phone 3 moved away from that familiar layout to a more minimal, dot styled matrix. Users say that it feels gimmicky. Glyph features like games, toys, and a grainy camera viewfinder don’t really provide much value.

Going Down a Slippery Slope

For all the great things Carl Pei has done, Nothing could be following a parallel path to his previous company, OnePlus. Similar to Nothing, One Plus was an enthusiast centered phone brand. However their fanbase has turned against them citing cost-cutting measures, increased pricing, and chasing mainstream features without the quality.

To avoid this trap Nothing seems to be leaning into a more intentional strategy for 2026 by skipping their flagship launch and focusing on other products. These may include initiatives such as AI native experiences and combating component pricing surges.

Ultimately, Nothing’s success will depend on whether they can convince their fanbase that they haven’t diverted from their unique identity. They will have to make some difficult decisions as the brand matures from niche to mainstream.

Takeways

Here’s a summary of what we learned from Nothing’s journey:

1. Low Risk V1 HW: Nothing used earbuds to build manufacturing trust and validate brand demand before tackling the smartphone market.

2. Design as a Moat: Nothing uses industrial design as a core business strategy to attract lead users who are dissatisfied with the industry’s stagnation.

3. Key Partnerships: The cultural credibility of Teenage Engineering allowed Nothing to grow faster and create a loyal fanbase.

4. Founder Marketing: Carl Pei’s public facing style creates an organic community sentiment and a level of transparency.

5. Uncertain Future: Nothing needs to act fast to maintain its identity during a period of negative user sentiments and rising global component costs.

That’s all for now. What company should we cover next?

Thanks for reading

Make sure you check out some other articles:

• Design for Manufacturing 🤖

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

Share

I got the chance to talk with an industry veteran and fellow Substack author whose work I’ve admired for quite some time.

Glen Turley is a leader in engineering and manufacturing. He has developed world-class systems at Apple, Rivian, and Tesla, among others. He also teaches at the undergraduate, graduate, and executive levels.

One of the reasons I started this newsletter was to bring real-world stories into the realm of physical product-making content. The lessons from Glen’s journey are inspiring, as he offers valuable insights on how to take products from concept to mass production.

Check out Glen’s work here 👇

• WattFactory Newsletter

• Linkedin

• Making Your Product Manufacturable

🤔Why Talk About Manufacturing?

I think it’s important to articulate why I chose this topic. After all, my newsletter is about hardware product management, where I typically focus more on the why, what, and who of a product rather than the how. The how, was a part of my previous life as an engineer, and there’s already great content on that topic.

But the more I write about product making, the more I realize how invaluable time on the production floor is. Especially now, especially in the age of AI.

AI has many benefits in the product development cycle. You can use it to augment product work like market research, competitive analysis, financial models, user needs studies, and even product requirement documentation. You can also use it to compress design work. You can generate block diagrams, schematics, layouts, BOMs, CAD, and even simplify factory MES systems with a single prompt. This will enable innovators to build at a pace we’ve never seen before.

But you can’t use it to replace intuition and the pain of scaling a physical product. One needs to spend time on the factory floor to see what’s actually feasible (Genba as the Japanese call it). Assembling a part, opening a mold tool, assessing fixtures, breaking components, and scaling a manufacturing line. All of these things are vital to building world-class products.

In my humble opinion, the over-reliance on AI tools may give the false perception that a demo or prototype is as good as a production-ready product. The two are very different. You cant “vibe code” your way to a robust physical product that satisfies user requirements, regulations, design intent, and quality targets.

At Tesla, Elon used to have this saying:

In his estimation, it could be 10 to 100 times harder to design the manufacturing system than the product itself. While product design gets a lot of attention, the complex, capital-intensive process of making devices ready for mass production is less appreciated. That’s why I’m so excited to talk to Glen about his insights. Sit back and enjoy.

🎤 Interview With Glen

1. Can you talk to us about your background?

For sure, I am approaching 30 years within manufacturing both in industry and academia, split between both the UK and USA. I have been fortunate enough to work for some amazing companies including Tesla, Apple and Rivian and launching over ten products in as many years. I am now starting my next adventure as the Head of Quality Intelligence at Next-Gen Contract Manufacturer that is currently in stealth mode. Our focus is to build the first truly software-defined factory. It is a new challenge that I am incredibly excited for.

2. You’ve built world-class products at companies like Apple, Tesla, and Rivian. How were their product development cultures different?

There is actually a lot of commonality between Apple, Tesla and Rivian with regard to their product development cultures. Their focus first and foremost is to build an amazing product and if that presents manufacturing challenges, then that is something to be tackled head on and not to be avoided or mitigated for. The stories are famous of Apple Engineers being in factories in China until the small hours figuring out how to produce a complex part using a new process to exacting standards. Those tails are true both at Rivian and Tesla and I have had my fair share of long nights figuring out how to assemble or weld parts together to consistently hit precise tolerances to ensure optimum functionality.

I would say that these three companies are the exception, not the rule. They are not rigidly tied to established processes because they are constantly pushing the boundaries. If I compare them to one of my former companies JLR, who recently shutdown for six weeks because of a cyber attack, sending large swathes of the company home, putting the UK automotive supply chain at risk. This would never be allowed to happen in Silicon Valley, every part of the company would be mobilized to develop alternative processes as well as associated checks and balances to get production back up and running again in record time.

3. What are the challenges in designing products for consumer electronics vs automotive?

Yeah, here there are some differences. Starting with consumer electronics, each part is produced via precise processes, for example, the phone enclosure which is largely CNC milled with micron level precision. Due to the size of the individual components and assemblies and the quantities they are produced in, literally hitting a million phones a day at peak, 100% inspection is widely implemented throughout the supply chain so that small quantities of defects are filtered out at every stage, minimizing downstream production issues. Where this becomes challenging in design and launch is aligning quality systems with the design intent, especially for characteristics such as gaps, color, and cosmetic defects that are evaluated by industrial designers. These designers have a trained eye and your job is to align the spec, measurement system, and production process to maximize yield whilst remaining true to the industrial designers intent. This could mean binning parts so that certain distributions of spec of button color, are matched with the same distribution of enclosure cover, effectively developing a spec within a spec.

Automotive is a different beast, with the exception of the Electric Drive Unit, which is manufactured using the same precision processes as a Phone Enclosure. The other key subsystems such as battery enclosure, vehicle body or general assembly are produced using far less precise processes such as stamping, injection molding and then assembled via welding or torquing parts together in vast jigs. In addition, the vast number and size of the parts mean that the same level of quality control and defect screening simply isn’t possible. Further, because many parts are not rigid, they do not behave the way they appear on a CAD screen. All this means that individual parts may not meet their specifications, but with the right tooling, manipulation, and by shifting variation to less sensitive areas, the final product can still achieve its design intent. However, this also means there is far more debugging required in the assembly processes, and production ramp-up is much slower than in consumer electronics due to the amount of problem-solving involved.

4. What was your favorite product to work on?

I would say there were two products that stand out. The first was the blood oxygen sensor for the Apple Watch. My background is in GD&T, tolerance analysis and metrology so this was completely new for me. While it causes stress, it is extremely rewarding to work on challenges that I have never been exposed to before. To produce a machine that could test accurately that the sensor was functioning correctly at a cycle time of a few seconds, meant not only developing the automation, but how the various LEDs and photodiodes interact to architect a valid testing methodology. The project took six months from inception, to benchtop demo, to the first mass production machine.

The second product was the Rivian R1S, the best SUV that is on the road today. But if you are not aware, it is manufactured on the same production line as R1T. The issue, we had launched R1T, and it needed to ramp, which meant that production was six days per week. This left only Sunday’s to commission R1S and I was in charge of Bodyshop Dimensional Accuracy, and production fixtures had not been validated from their initial design. Therefore, there was an intense period of commissioning, producing, learning, re-designing, adjusting and continual improvement over a very short intense period and we got our first sellable vehicle in a little over six months, which may sound lengthy, but this represents less than 30 commissioning days which is insane to think about it now for a completely new vehicle.

5. You’ve just finished a series on DFM. What’s design for manufacturing?

I really enjoyed writing the series on ‘Making Your Product Manufacturable’. I did not expect it to stretch over five articles. It really helped me to crystallize how design and manufacturing are inextricably linked, particularly in mass production. The engineering drawing is what binds the two together. The Designer will view it to determine if a part will function reliably once it is assembled into the final product. While the manufacturing engineer will view it from the perspective of whether their process is capable of achieving the required level of accuracy and precision to meet the tolerance specified on the drawing.

However, the engineering drawing is not a simple handover, particularly with complex assemblies there are multiple ways to achieve the required tolerance and hence functionality, which requires an intense dialogue between design and manufacturing, with regard to process sequence, datum selection and tolerance analysis to ensure the requirements of that particular are met as well as subsequent downstream processes.

6. How early in a product development process should DFM be considered?

It can be considered right when the initial surfaces of a product design are released, either through CAD visualization, or foam/clay model. It is where you as a manufacturing engineer can identify complex interfaces, which can be desensitised through the use of different strategies such as slip planes, offset surfaces, disguising interfaces or minimizing the number of parts that come together in a visually sensitive area.

However, this should not come at the expense of the product being awesome or compromising its design language. This is where Product Managers can have a key role in managing the creative tension between industrial design and manufacturing, ensuring the product brief is maintained through every DFM decision at this critical stage.

7. When is one time when DFM was ignored?

In the ‘Making Your Product Manufacturable’ series I wrote about datum transfer and ensuring that you maintain both the correct number of datums to hold the part rigid during manufacture and maintaining them as much as possible as the product progresses through the assembly process.

Well, there was one product I worked on where the number of datums the vehicle body sat on during the assembly process differed from when the doors were assembled to the vehicle, to where it went through the paint shop, and then through General Assembly. In addition, where the doors were assembled was not representative of who the vehicle sat on its tires at the end of the manufacturing process.

The end result was that the gap and flush of the doors, which is critical to how vehicle looks to the customer, changed as the vehicle process, which resulted in a series of re-fitting processes being implemented throughout the manufacturing process, until it was realized the body datum locations in the door assembly line were not supporting the body enough, resulting in sagging. Once this was found, and the expensive fix was retooling the datum locations in this line, the gap and flush through the production process became more consistent.

8. What’s your favorite manufacturing process to observe in person?

I have been fortunate to work with a number of manufacturing processes, from CNC, to injection molding, to pick and place automation. But my favorite is still the area I settled in as an apprentice back at JLR all those years back, and that is the vehicle bodyshop.

The vehicle body is the coat hanger for every part of the vehicle from cockpit, to seats, to battery enclosure and drive unit. Every part fits to it, which means it is not just about assembling the body together, it is a constant trade-off in managing the requirements of so many vehicle subsystems. In addition, it is heavily automated so seeing industrial robots manipulate and weld complete sides of cars is awesome to watch.

Further, thanks to Tesla, and now some manufacturers in China, bodyshop production is being disrupted with initiatives such as gigacastings, cell to chassis vehicle architectures and the unboxed manufacturing process, so expect further innovation in the future.

9. What’s your ideal product development process?

I think a general stage gate is good, in terms of providing a prescriptive guideline of all the activities that need to happen to bring a product to market. But it can be too rigid, and it is not good for innovation, which is more aligned to fast short iteration loops contained within sprints. Therefore, I prefer agile methodologies, which are more comfortable with multiple project changes, rather than one all-encompassing design freeze that is often idealized within stage-gate processes. However, this is difficult to achieve with hardware, because lead-times are longer, and changes need to be coordinated. If there is no coordination, then parts don’t fit together, manufacturing equipment is built to the wrong design level, etc.

Therefore, I think for complex projects, I would breakdown down stage-gate activities into a series of sprints, where changes are coordinated within these sprints, which are then tested and iterated upon within further sprint activities to allow learning and improvement. For this to be successful manufacturing equipment needs to be designed to be modular so tooling can be quickly swapped out to accommodate product and process improvements. As manufacturing becomes more software designed, I see this sprint methodology becoming more prevalent allowing for manufacturing to keep up with product technology changes.

10. What are some tips for scaling a production line from concept to mass production?

I think my biggest tip is to be social, become known to every function that your department touches. You are not an island in mass-manufacturing, the more you find out what others are doing, the earlier you can get ahead of changes coming down the line, as well as highlight potential problems and seek to address them.

Then second time around, these functions will reach out to you without prompting and learning becomes embedded, oiling the wheels of the product development cycle better than any written down process. Apple taught me this more than any other company, nothing is written down but everyone learns who they should be coordinating with, and through this coordination issues are identified and escalated early and dealt with extreme urgency.

11. Can you help people understand why scaling a HW product is harder than designing it?

No part of assembly will come out exactly like it is modelled in CAD or behave exactly as a simulation predicts. These simulations allow you to make educated manufacturing decisions, i.e. is holding a part using a certain set of datum locations, better than another set. However, educated decisions only get you so far, you need to understand how your design decisions work in practice, and this is even truer for new technologies or processes, because there are more unknowns.

The more complex the manufacturing process the more interactions, and modes of failure there are. Each one needs to be validated, and necessary controls put in to ensure that each validated production step is robust. Oftentimes, these interactions are where unexpected things happen, and require in depth problem solving, which means looking at data from upstream processes, observing production steps, to see why the product is not behaving as it does on the CAD screen.

Further, for every incremental increase in volume during ramp, new problems will arise which were previously masked by rework, longer cycle times, or by utliizing labor that now needs to be stretched thinner.

In short, manufacturing is dynamic, while CAD is static. It is a living organism and either through natural variation or because of failure in a complex chain of events, outcomes are not always predictable and it is the manufacturing engineer’s job to find out why and implement the necessary corrections to restore harmony to the system.

12. Where do you see the biggest changes in HW product design & manufacturing in the age of AI?

I think we’re entering a period where almost every piece of manufacturing software will be rewritten for the age of AI, from controls architecture to quality systems to MES. The biggest shift is that AI will finally close the gap between design and manufacturing.

Today, you can take a CAD model of a single part and automatically generate toolpaths and G-code. In the future, AI systems will do this end-to-end for full assemblies. They’ll interpret CAD together with volume targets, cost requirements, and constraints. Then break the product into a logical process sequence, define the manufacturing steps and the quality checks and even propose production equipment, robot programs, weld sequences, and controls logic.

This requires two things, Finetuned foundation models, and Structured proprietary manufacturing knowledge so the models can reason about real factory constraints. Engineers won’t disappear, they’ll be in the loop to steer outcomes, validate edge cases, and make the high-impact design decisions. But the time between a design update and factory implementation will shrink dramatically. We’ll see factories that can reconfigure in days rather than months.

13. How can young engineers and product makers break into manufacturing related roles?

Internships and Apprenticeships are invaluable here. I still think my biggest leg-up in my career was studying for my degree while I was working fulltime at JLR. It allowed me to understand manufacturing from a theoretical and practical level. Even if you want to be a Designer, and you are good with your hands if you can get a good manufacturing co-op with true responsibilities to deliver a project. This will be invaluable for your future career. You will design with a lot more awareness of the manufacturing constraints. Some designers think that if they can fit a part to a vehicle their job is done, but it needs to fit within cycle time, with the same result time after time. Having manufacturing experience is invaluable to gain knowledge of these constraints.

14. You’ve been an IC and in management. What’s some advice you have for younger professionals?

I have gone from IC to Manager and back again, changed companies in between, and I would say my way is not necessarily the best way. Engineering is broad, and to think you will find the most ideal role straight away for you to progress to management and be happy and fulfilled is slim. I would say initially don’t be afraid to try new things, and it is probably easier to transfer into different departments within the same company. It will broaden your knowledge, gain awareness of where you can have the most impact, and also where you want to develop your skills. Doing all this first, makes the transition to management easier, as you will be increasing your impact in an area where your skills and aptitude are truly aligned, allowing you to mentor engineers with a broad and deep perspective.

My final piece of career advice is, once you have the required foundational knowledge, which may come from an established company. Look for a company whose ambitions match your own, which means that your growth trajectories will be aligned. You don’t want to develop deep narrow expertise in a stagnant company where your hopes of progression are super limited. Instead, a scale-up will be hungry for both your acquired knowledge as well as your ability to learn and problem solve, and so your career will naturally scale with that company.

For more tips, follow Glen’s work here 👇

• WattFactory Newsletter

• Linkedin

• Making Your Product Manufacturable

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

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🙏Thanks for reading

Make sure you check out some other articles:

• Financial Model for Physical Products 💰

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

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Today we’ll discuss a reliable mechanism for determining if a product will be a hit or a miss after launch. This tool helps clarify if leadership had the right vision, if the product team defined valuable use cases, and if engineering implemented the correct technology. Let’s talk about user trials for physical products.

What Are Trials?

Trials are structured phases of product testing where a device is put into a customer’s environment before launch.

They validate if the device fulfills the product requirements. These are different from engineering builds (EVT, DVT, PVT) in the sense that they focus on user feedback, as opposed to technical feasibility (reliability, lab tests, certs, etc). However, it should be noted that there is some overlap in both.

Trials are where a product manager can shine by ensuring customer needs are properly understood and the product can delight in a real world scenario. Why PMs specifically? Well because the role of the HW PM is to ensure the product is financially feasible, technically viable, and user desirable. Most of all, their role is to validate that a product solves genuine user problems.

There are generally three trial phases that happen during a typical ⚙️hardware product development process.

Phase 1: Alpha

• Timing: Coincides with EVT builds.

• HW Maturation: Prototypes with reliability gaps on the hardware side and basic, but core functionality. However, the devices should be fully functioning at a system level.

• SW Maturation: Early builds with high bug rates, incomplete UI/UX, and initial functionality.

• Users: Internal employees in office or lab settings who are more forgiving as they know the product isn’t mature.

• Goal: Catch obvious non-conformities, validate usability, and deliver feedback to design/engineering.

Phase 2: Beta

• Timing: Coincides with DVT builds.

• Hardware Maturation: Design should ideally be finalized, as these units will go for certification testing.

• Software Maturation: Near feature complete with room for tuning product scalability.

• Users: Select group of customers in real world environments. These users have a lower tolerance for issues and expect higher quality experiences than employees.

• Goal: Validate design maturity with unbiased feedback.

Phase 3: Gamma

• Timing: Coincides with PVT builds.

• Hardware Maturation: Design should be locked, ready for mass production ramp.

• Software Maturation: Production release candidate that is stable and optimized for performance.

• Users: Customers in real world environments, similar to beta.

• Goal: Validate if the product is ready to be shipped at scale (functionally, operationally, logistically, and with all support systems intact).

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Why Do We Need Trials?

Because they prevent bad products from being shipped. I’ve talked in an earlier post about how Humane’s AI pin was a disaster. In my humble opinion, the negative press could’ve been avoided if they had product managers actually advocating for desirable user experiences.

Humane’s PMs should’ve used trials as a mechanism to block inadequate features or ideas, even if the engineering team pushed them. Even if the technology seemed cool.

Alpha and beta testing should have raised red flags regarding issues like overheating, slow AI responses, low-resolution photos, and poor projector visibility.

What about some examples of alpha, beta trials being done properly? Check out the two products below, which were discontinued before shipping.

On the left we have Amazon’s home drone camera, which seemed really cool but noisy motors and flight issues reported by early users prevented launch. On the right we have Apple’s AirPower mat, which resulted in thermal issues coming from a complex multi-coil design.

Both companies made the costly but right decision not to ship these devices into production.

Example: How To Perform Trials

Imagine you’re a product manager at a smart thermostat company, designing your flagship product, the HeatSync Pro. It’s a premium smart thermostat that combines climate intelligence with an elegant design.

In earlier posts, we talked about how to develop a 💰 financial model and 🚀 product requirements for this thermostat. Now, let’s discuss how we can design user testing to validate assumptions and gather key feedback.

Overview

Let’s start by documenting a summary of the plan. Some general tips:

• Because this is HW product development, customers need to feel, interact with, and physically use your product. Remember to take your time when planning these trials. The learnings can be exponential and help de-risk major issues post-launch.

• Always account for extra quantities when planning builds with your contract manufacturer.

• Our example only lists the US as a region, but ensure you test in multiple countries if you plan to sell there.

  • For example, once I was close to launching a product, but alpha testing in a country we hadn’t accounted for revealed a major design flaw. The device wasn’t compatible with certain power outlets. Our team assumed it would be, and we were wrong. This saved us from a lot of negative press after launch.

Trial Overview Table

Test Plan

Next is the test plan. This is the meat and potatoes of your trials. Write a clear strategy for how core product requirements will be validated, with specific instructions for customers. Some tips are below:

• Test as early as possible, especially with hardware products. Pick your top features in case you need to front load development. This is because the later in a program design flaws are found, the more exponential the cost is to change them.

• To prioritize features, look for those that are hardware specific, introduce new technologies, require new designs, or most importantly, are the ones that customers value. Test both in parallel but if a priority call needs to be made, software issues can be mitigated later in the program at a lower cost than hardware flaws.

• In our thermostat example, this would mean testing themes around air quality sensing, energy savings, and smart temperature routines.

• Also, note to spread out activities. Trials are usually in 4 week chunks. Putting everything in one week will overburden users, as they will take the path of least resistance. This friction will prevent your team from getting reliable data.

Test Plan

A hypothetical test plan is shown below.

Metrics

The saying “you can’t improve what you don’t measure” holds true. The next step is to quantify each trial’s performance. While most items can be monitored through dashboards such as signal strength, temperature accuracy, and sensing, other subjective metrics should be captured through surveys or other feedback mechanisms.

These include things like impressions of packaging and install experience. To some these may seem trivial, but consider every step of the customer’s journey. Everything from the inserts in the cardboard of the packaging to the type of fonts used on the branding is a reflection of your product.

One metric to capture overall impressions and product satisfaction is CSAT (Customer Satisfaction). Some companies use star ratings while others use NPS (Net Promoter Score). Whatever it is, try to set a high target in trials because once it’s in the market, customers will be more unforgiving. It’s better to aim high in a controlled environment and miss than get low customer satisfaction scores post-production.

Lastly, have realistic progressions for these metrics with each phase of the trial to help development teams. Below is a partial list of sample metrics for our thermostat example.

Incorporating Feedback

As highlighted above, one of the reasons for running trials is to fix product or design flaws. But what does that really look like? Below are some hypothetical examples.

Example 1: Audio Clarity

Problem: 30% of users during alpha trials report that the thermostat’s speaker is too quiet for voice prompts and alerts, especially in larger or noisier rooms. Some describe muffled audio when standing more than 6 to 8 feet away.

Mitigations: Below are some mitigations your engineering teams might explore for the next build (DVT) and trial (Beta). They will need to be balanced against product cost, value to users, dev effort, and time to market.

1. Amplifier: Integrate a higher rated audio amplifier to boost output power without significant heat or efficiency loss.

2. Speaker Placement: Move the speaker module to the sides of the device instead of the back. This provides less obstruction for the driver and clearer output.

3. Firmware: Increase the default alert volume, add dynamic range adjustments, and provide user volume calibration during setup.

4. Speaker Upgrade: Evaluate higher sensitivity speaker drivers (dB SPL) to achieve greater loudness.

Example 2: Difficult Install Experience

Problem: 20% of Beta testers struggled with mounting as the adhesive didn’t stick well on textured walls. This prevented the team from achieving the average setup time metric, as it was greater than 12 minutes.

Mitigations:

1. Improve Setup Guides: Clarify in the app and on the physical booklet to better prep the textured surfaces for adhesive readiness.

2. Improve Adhesive: Implement an adhesive with a stronger bond to textured surfaces or increase the number of adhesive strips.

3. Different Mounting Tech: Design an additional mounting plate with screws to augment the adhesives.

House keeping

Lastly, there’s some admin work for managing trials, and I didn’t want to overlook it, as I find that product and tech makers usually take such tasks for granted. But details matter.

Recruiting

When finding users for your trial, you might need to keep an incentive structure to motivate them. These can vary from gift cards to post trial discounts on production models. Also ensure that users fit your target demographic by using screening criteria. For our example it would be things like customers who are in homes (not apartments) for access to their HVAC, consent to providing setup photos, being iOS users, and availability to submit data every 5 days. Also, ensure that there are NDAs, as one of the keys to delighting end customers is the element of surprise. This can only be done if there are no leaks.

Recruitment Email

Make a concise, attention grabbing email that excites potential users for trial participation. Highlight how their time will help your product, compelling parts about the mission, required commitments, incentives, and a sign up form. Provide regular, accurate updates and be quick to respond to questions.

User Instructions

This may seem obvious, but include simple, easy to follow instructions on each week’s trial activity. Include pictures and SOPs. The harder they are to understand, the less meaningful the data will be for product insights.

Feedback

We made a test plan in the section above but some may be wondering how we get feedback from customers? Typically, PMs use standard trial homework templates like the one below. It breaks down user tasks into a format where feedback can be recorded. Use a proper platform rather than a simple survey to track versions, timestamps, photos, and device metadata.

That’s all for now. How does your team run user testing for physical devices?

Thanks for reading

Make sure you check out some other articles:

• Financial Model for Physical Products 💰

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

Subscribe now

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I have a confession. I spent years making products for millions of people without knowing if they were profitable. When I asked teammates, no one really knew the whole picture either. Sure finance knew about headcount, engineering owned the BOM, and product worked on LTV. But what about an end-to-end story?

As I learned more about the variables, it became intimidating. MVA, tariffs, distribution channels, gross profit, Op Ex, and NRE. How does it all come together?

Great products are user desirable, technically feasible, and business viable. The last part is something that often gets left behind. Today we’ll talk about a framework for making financial models for physical products.

Background

Lets level set before we dive into the material. On average, gross margins for physical devices range from 20-45%. There are industries with even lower margins, such as automotive, with 4-7% returns. Software products in contrast yield profits between 60-70% in general.

One of the most significant costs in making hardware products is BOM (material cost). Just look at how many components go into an iPhone 16 and the allocation of each.

The top cost contributors are electrical parts such as cameras, processors (SoC), and displays. This trend is true for most consumer devices, whether it’s in wearables, smart home devices, or IoT products.

Why is any of this relevant to us as product builders? Because it ensures we know what we’re getting into when evaluating new initatives. It clarifies where to focus efforts in product architecture or concept discussions.

The charts above indicate that physical devices won’t yield the same scale of returns as software, and BOM cost efficiency (in general) comes from prioritizing electrical components.

🤔Interested in learning 0-1 HW Product Management?

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Disclaimers & Assumptions

Before we start,

• I’ll be creating a hypotehtical scenario in this post. Please don’t use any material as ground truth for your product lines.

• This content is from the perspective of a HW device product manager. Feel free to state insights in the comments from your respective backgrounds (as supply chain managers, engineers, founders, etc.).

• I framed the model from a medium sized company’s view point. Looking at it through a startup’s lens would introduce too much variability (funding, investors, volumes, capital) to provide meaningful guidance.

✍️Course Starts Here

Imagine you’re a product manager at a smart thermostat company, tasked with defining the financial model for the next flagship product - the HeatSync Pro. It’s a premium smart thermostat that combines climate intelligence with elegant design.
In an earlier post we talked about how to define product requirements for such a product. Now it’s time to get into the financials as the next step in our product development process.

Step 1: MSRP

Determining the retail price is a bit of a science. We know that companies provide perceived value to customers in the form of a product. That value is exchanged for a price.

Pricing can be set by adding a certain amount to the cost of each item (cost-based), adjusted by how much consumers are willing to pay if it’s a higher-perception brand (value-based), or set based on competitors (market-based).

For our example, since the smart thermostat market already has established pricing tiers for premium products (Google Nest), we’ll use market-based pricing and settle on $250.

Another strategy could have been to implement penetration pricing, where initial prices are lower to beat competitors.

Any pricing assumptions can be validated through surveys, A/B tests, or conjoint analysis studies, where we can objectively measure how much customers value individual features in a given product line.

Pricing can also be adjusted using versioning, which involves developing configurations at varying tiers to serve more consumer segments. This helps companies maximize revenue by capturing value from budget-conscious consumers to high-end users. The enhanced/mid tier is the one that usually sells the most volume. This tiering also psychologically positions people who are undecided about a purchase to go with the mid-tier product as it is more affordable than premium options but still has better features than the entry/good tier.

Step 2: Volume

This is the number of devices a company wants to sell over a time period (3-5 years). Determining the number involves forecasting demand from your target market, competitive benchmarking, and considering adoption rates. This needs to be balanced with production capacity and cash flow constraints.

For our example, let’s use 300K units over three years. This can be a relatively low volume for a smart home product sold by a medium-large company, but it fits the premium tier. Lower to medium priced products typically sell in the millions of units.

Step 3: Average Selling Price (ASP)

The average selling price is the actual price at which a product sells for over time. MSRP is just a benchmark. This is because we have to take distributors and promotions into consideration.

3.3 Identify Distribution Channels

To calculate ASP, first we need to determine how the product will be distributed. For our example, let’s assume:

• 80% of units are sold directly online

• 20% are sold via Amazon

3.4 Identify Price Per Channel

• Direct: $250

• Non Direct: $200 because Amazon will take a hypothtical 20% cut.

3.5 Identify Discount Rates

Next let’s identify how our price is impacted by promotions. The basic premise of promotions is to enhance revenue in the long term, through offering temporary reductions to make a product more attractive. Frequency is how often there is a sale, and amount is the value of the discount. I’m using the words promotion and discount interchangeably here but they are different.

3.6 Identify Price After Discounts

• Direct: $250 × (1 - 3%) = $242

• Non Direct: $200 × (1 - 5%) = $190

3.6 Identify Average Selling Price (ASP)

ASP = (Direct Price after Discount × % of Units Sold Directly) + ( Non Direct Price after Discount × % of Units Sold Non Directly)

• ASP = $242 × 80% + $190 × 20%

• Average Selling Price = $232

Note how our ASP is $232 versus the MSRP, which is $250. This will be important for net revenue calculations.

Step 4: Returns

Don’t forget to factor in returns. Lets assume 3% of units will be returned. This number varies within products and industries.

Return Value (RV) = Units Returned × ASP

• RV = 300,000 × 3% * $232

• RV = $2,088,000

Step 5: Net Revenue

Net revenue is the actual income for a product line after sales and deductions. Notice how ASP is used, not MSRP.

Net Revenue = (Units Sold × ASP) − Return Value

• Net Revenue = (300,000 * $232) − $2,088,000

• Net Revenue = $67,512,000

Step 6: BOM (Part of COGs)

COGs refers to the cost of goods sold, essentially the total direct cost to make a single unit. Part of COGs is BOM, which is the material cost of each component (plastics, metals, chips, batteries, and more).

BOM is the largest contributor to per unit cost, hence why it's so important to optimize. As stated in the iPhone example above, the top contributers to BOM are usually electrical components.

So how do you reduce BOM cost?

There are many ways, but the most impactful method is through design. The earlier this is done in the development process, the more the potential gains. It’s important to always question technical decisions, but not at the expense of user experience or performance. Respectfully ask your teams why parts, processes, or design choices are truly necessary. Try to reduce complexity without compromising the product. Here are some real examples:

• Mechanical:

  • Once I saved $700K+ on a product by negotiating with a director to remove a component which (in my humble opinion) was dated and unnecessary for customers. The team was reluctant because there was friction in updating the tooling. The real reason, however was the usual “that’s how we’ve always done things”.

• Electrical:

  • In another instance we managed to save $3M+ on a product line by simply asking our engineering team why we were using a certain processor when the use case required something simpler. The reason for the overkill chipset was that it was the standard across the team for a family of product lines, and no one wanted to do the work to migrate to another design, codebase, and supplier.

Other ways to reduce BOM are through design for manufacturing/assembly studies and supply chain negotiations. Having a good global supply manager on your team is invaluable to help with supplier selection, purchase consolidation, bulk discounts, and dual sourcing. For any GSMs reading this, let us know some tips in the comments of how you’ve managed to save costs.

Back to the example, the picture above is what a draft BOM would look like for our premium smart thermostat. Notice how the most expensive components are the display, chipset, and sensors.

Step 7: MVA Cost (Part of COGs)

MVA stands for Manufacturing Value Added. It encapsulates the additional costs to transform raw materials into finished goods. The largest chunk of MVA is usually labor. Other components include repair or scrap material costs. Labor refers to the folks who will be assembling, testing, quality checking, and packaging our product at the contract manufacturer.

MVA is another reason why I’m such an advocate of being on the factory floor. Doing so can really help simplify processes and save costs. I’ve had instances in the past where a supplier quoted me 10 headcount for a sub-process. Once I got to the factory overseas, observed them performing the process, I realized it could be done in half the time. We then re-did the assembly together, and they agreed.

Note, however, that cutting headcount may have a larger impact as factory workers overseas may come from rural areas and depend on these jobs. If you are in a position to optimize costs, try to ensure there’s another station or product that those workers can go to. Contract Manufacturers will usually quote a % of the BOM (5-15%) for MVA costs. For our example, let’s use 8%.

Step 8: Remaining COGs

There are some more costs associated with COGs.

• Tariffs

  • Taxes for importing from certain countries, usually a % of the BOM.

• Shipping

  • Inbound (from factory to a warehouse)

    • Is usually a flat amount per unit and depends on the size/weight of the package. For smaller devices, we can expect $0.2-3/device. It also depends on the shipping mode. The usual method is ocean shipping, with air tansport being used in a time crunch.

  • Outbound shipping (warehouse to customer)

    • These costs are driven by carrier rates, geography, and speed. They are higher than inbound costs. We can expect $3-$12 per unit for smaller devices.

• Warranty

  • This covers the labor, service center processes, and parts to honor the warranty to the customer. It is usually 1-5% of the BOM.

• Returns

  • Includes the refurbishment, inspection, or repacking of returned units. It is usually 5-15$ of the ASP.

• Royalties

  • Licensing fees to use specific algorithms (codecs, wireless standards, etc.). These are usually 0-5% of ASP.

Step 9: Gross Profit Per Device

Gross Profit per Device = Net Revenue per Device − Total COGs

GP = $225 − $130.41

GP = $94.62

Gross Margin (%) = Gross Profit per Device / Net Revenue per Device × 100

GM = ($94.62 / $225)× 100 = 42%

Note that this is a relatively high gross margin. Also note that these margins are further eroded in net profit calculations.

Step 10: Operating Expenses

Thought COGs were the only costs in product making? There are more. Below are some variable operating expenses.

• Cloud

  • The amount of money to run products on cloud infrastructure like AWS, Google, etc. Its typically 1-3% of the ASP.

• Marketing

  • This is marketing spend that scales with each unit sold, such as digital ads, affiliate payouts, referral incentives, and more. Don’t confuse this with CAC (customer acquisition cost) or fixed brand campaigns and salaries. It’s typically 5-15% of the ASP.

• Customer Support

  • The cost to answer customer queries to guide them through setup or performance issues for each unit. Typically 2-5% of ASP.

• Warehouse/Shipment

  • The cost of warehouse handling, outbound shipping, and delivery. Typically 3-7% of ASP

Step 11: Subscription Revenue

I don’t like subscriptions. Products used to be designed for long-term use. Then they were designed for obsolescence. Now, it feels like they’re designed to extract even more from customers through subscriptions.

But to counter my bias, hardware products are extremely challenging to make at scale, and they have lower margins versus their software counterparts. Most carry a high risk for business viability. From a leadership or investor perspective, subscriptions are one of the easiest way to mitigate these risks. From their POV, if additional value is being provided to customers, then it makes sense to augment the base price with a monthly fee.

There are many nuances to calculating subscription revenue, but to keep it simple for our thermostat, let’s assume the monthly subscription price is $10, with a 30% adoption rate. Our effective subscription revenue per device sold is $36.

Notice how we just added $36 per device in revenue. This is significant for life time value calculations.

Step 12: Fixed Costs

Thought COGs and operating expenses were the only costs in product making? Think again. Fixed costs can be considered as the initial investment required to launch a new product.

12.1 Headcount

• This is the team needed to create our product. Make sure to account for both development resourcing (during design) and sustaining (after the device launches).

• The table below represents an example breakdown for our smart thermostat.

Allocation is the percentage of their time spent on the program, as employees typically work on more than one thing. Months are the amount of time needed. Man-months is a product of these two and FLC/”fully loaded cost” is salaries plus benefits. Let’s assume an annual FLC of $150K for the team to keep the example simple.

12.2 Tooling + CM NRE

The cost of injection mold tools, test equipment, assembly fixtures, automated machinery, and more to build the product from the prototype stage to mass manufacturing ramp. CM NRE is non-recurring engineering, or the cost of one-time R&D activities from the contract manufacturer.

12.3 Certifications

The cost to ensure our device complies with regulatory, safety, and market entry requirements. These are typically divided into standards for wireless, environmental, and electrical categories. They also vary by which region the device needs to be sold in. Testing is done in 3rd party labs, usually at the DVT phase of a program.

12.4 Samples

Samples from the factory for design, engineering, or marketing activities.

Step 13: Life Time Value

LTV is one of the most important financial metrics for any business. In our context, it means the total return we can expect from a single customer during the time they own a device.

Note, all values in this formula are per device

Life Time Value = Net Revenue + Subscription Revenue − COGs − OpEx − Fixed Cost

• LTV = $225 + $36 − 130.41 − $43.88 − $11.21

• LTV = $75.52

What’s a good LTV to aim for? It depends on the business, product line, and leadership goals. LTV is usually:

• 70-90% of MSRP for entry-tier devices

• 50-70% of MSRP for mid-tier devices

• 30-50% of MSRP for premium-tier devices

So how’d we do? Ours is 30% of MSRP, which is on the lower end of products in the premium category. Remember the point about why leadership and investors love subscription models for physical products? This is one of the reasons why. One of the easiest ways to increase LTV is to increase subscription costs. Going from $10/mo to $15/mo increases our LTV from $75.5 to $84.5.

Summary

There isn’t a one size fits all approach to developing financial models. Each organization may focus on different metrics. Some like looking at margins, others at LTV/device, and some at fixed costs. Our model is pretty optimistic, as our fixed costs seem low compared to the total LTV. Usually, they’re about half. If this were a real scenario, it would make me go back and re-look at NRE, tooling, and staffing costs to make sure we haven’t missed anything. It’s always better to assume the worst case and be conservative with numbers.

Financial models are nuanced and should be refreshed with every major phase of the program. Suppliers may provide updated material pricing, tariffs rates may change, or design modifications may take shape. How do you guys develop models? Leave your tips in the comments below.

HW Startup Financial Models

As noted in the intro, this post was painting a hypothetical scenario for a medium sized company. Startup financial models have their own challenges. It can take a while to raise capital. There’s also the stress of having enough cash flow to buy inventory. Here are some resources for physical product startups:

• Will your hardware startup make money?

• Hardware Startups: You Need to Understand Cash Flow

• Hardware + subscription financial model tutorial

Interested in more resources for HW PMing?

In addition to our articles on Substack, we offer tailored services in HW PM career growth and HW product development from idea to launch.

Get In Touch

Thanks for reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• Hardware Product Management 🚀

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

Subscribe now

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I recall coworkers at Tesla discussing a story about when Elon Musk met with a group of product leaders. He stopped talking, walked the quality executive to the side, and then returned alone to the manager meeting. The quality leader was fired on the spot. This was after a routine yard walk revealed a seal sticking out of a Model S. While Tesla still has considerable work to improve their product quality issues, this (alleged) incident taught me how seriously product-obsessed leaders take nonconformities.

My recent articles have been indexing on hardware product vision and strategy. And while that’s what we focus on as product managers, I realize I’m deviating from topics about actually building and shipping hardware. Today I want to get back to that and discuss arguably the most underrated aspect of HW product making: quality. It’s not exciting. No one dreams of being a quality inspector or engineer. But I like to think of it as a philosophy that’s not limited to any team or person. Being quality-centered is vital to building world-class products.

Have you ever wondered why there are people who own perfectly functioning 30-year-old Corollas? Or why Apple’s products last so long? At Apple, I worked on an issue where a part was out of spec by a few 100 microns. For reference, the average human hair is 80 microns. 99% of customers wouldn’t even notice such a problem. Yet our team worked for weeks, presenting to directors and VPs. There’s a saying in quality systems that 99% yield and 1% defects still deem a product to be 100% unacceptable for the customer who received the non-conforming unit.

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1.0 Issue Prevention

The most effective form of quality control is to prevent the issue before it happens. The best way to ensure quality is through defining the right requirements, good product design, robust process development, and detailed risk analysis studies. One philosophy that highlights this is Poka Yoke. This is a Japanese term that translates to “Error Proof”, indicating that products should be designed with error prevention in mind. Two prevention tools can help with this mindset.

FMEAs

Failure Mode Effects Analysis (FMEA) is a risk analysis tool that evaluates potential problems, effects, and detection mechanisms. After reviewing these variables, a risk priority number (RPN) is given to rank designs from highest to lowest.

This is a living document that starts at the design phase, ideally before prototypes are made. It should be updated through each engineering build and production phase (EVT to MP).

Take it from someone who has worked on critical FMEAs for airbags in automotive and batteries in consumer electronics, it’s always worth the extra effort to think through how a design can fail when in customer use. Below are some key terms:

• Failure Mode: How a product, design, system, or feature can fail.

  • Example: A smart home camera has thermal issues during operation.

• Effect: The consequence of the failure.

  • Example: Degraded performance, such as delayed video streaming and motion detection.

• Severity: How serious the failure is, ranked from 1 (no practical impact) to 10 (safety/regulation breach).

  • Example: Severity ranking of 7 because of the degradation of a primary feature for users (motion detection) without safety impact.

• Cause: The reason for the failure.

  • Example: Inadequate heat sinking (mechanical) and excessive power draw from edge AI processing on the local chipset (electrical).

• Occurrence: The likelihood that the cause will occur, ranked from 1 (unlikely) to 10 (persistent).

  • Example: Occurrence ranking of 5 due to a moderate likelihood. While components (processor, image sensor, RF module, etc.) do heat up, they are typically not in use for long periods.

• Detection: The probability of design or process controls to prevent or detect the failure, ranked from 1 to 10. Note that a lower number is better, meaning that there is a stronger likelihood of stopping the issue from happening.

  • Example: 6 in this case, because the camera doesn’t have many design controls to stop overheating. It has a small enclosure with minimal air flow.

• RPN = 7 x 5 x 6 = 210, thus making this a high risk item for users. This should force engineers to make the design more robust. The team needs to test more usage scenarios, simulate thermal corner cases, review the board layout for hotspots, modify heat transfer controls, and reevaluate their power model.

How do you decide severity, occurrence, and detection values on a range from 1-10? Luckily, there are reference tables with established criteria. Check out the following:

• Automotive products

• Consumer electronics products

• General templates

SPC

Another, more quantitative technique to prevent users from experiencing defects is to utilize statistical process control (SPC). SPC uses a data-driven approach to eliminate production waste. The goal of SPC is to move from detection to prevention, as companies typically rely on manually inspecting units. However, inspection is reactive and results in excess cost in the long run.

SPC assumes that data is normally distributed. Below are some helpful terms to know when looking at product manufacturing data.

• Specification is a quantified product requirement. Anything outside of your specification is a defect.

  • Example: A phone’s housing needs to be 8 to 12 mm thick or 10 +/- 2 mm.

• Upper Spec Limit (USL) is the highest limit in that specification.

  • In the example above, it’s 12 mm.

• Lower Spec Limit (LSL) is the lowest limit in that specification

  • In the example above, it’s 8mm.

• Nominal/Target is the center value of the specification. That is where we want the majority of our data to be.

  • In the example above, it’s 10 mm.

• Common Cause Variation: Regular variation that is always present in a process. It is natural, random, and has a small effect on overall performance.

  • Example: Gradual tooling wear over time or minor inconsistencies in raw material thickness leading to subtle changes in the phone housing’s thickness.

• Special Cause Variation: Atypical events that have a large effect on processes.

  • Example: A drill bit breaking, causing the tool to go out of alignment, leading to the phone housing being thinner than our design specification.

• Capability is the ability of your process to produce parts within specification.

• The two most common capability performance metrics in SPC are Cp and Cpk.

• There is some math that goes into calculating these. Since my newsletter serves as a high level intro to building hardware, I don’t want to get into the technical details to avoid intimidating readers. After all, the whole point of starting this newsletter was the decrease the barrier to entry of building physical products.

• Check this link out if you want to learn more about how they’re calculated.

• A very simple way is to imagine that Cp is how close the data points are to themselves (proximity). Cpk is how close the center of your data is to the target/nominal value.

Why does any of this matter? Its because Cp/Cpk values correlate directly with the amount of defective parts you send to end users. In general, the higher the Cp/Cpk, the lower the amount of bad parts. Typically, a cpk below 1 means that you’re in trouble and parts are out of spec. You also may be asking yourself “where can I find this data for my production process?” It should be coming from your contract manufacturer or process quality engineers.

2.0 Issue Detection

Realistically, all issues can’t be prevented. Mistakes happen, things slip, and that’s where tier 2 of quality control comes in. Detection means identifying an issue after parts have been produced. Detection controls stop defects from being shipped out of the factory. They are the most common, expensive, and often least effective line of defense. These controls are established using sampling inspection methods.

There are two types of detection checks. Depending on the complexity of your product, these can be set up at the final assembly line, at the supplier, or within sub-lines. Each check should have controls for both cosmetic and functional nonconformities.

1. IQC (Incoming Quality Control) focuses on evaluating the quality of components received from suppliers before production. Practically, this means a quality station at the beginning of your assembly line. For example:

   1. An IQC station as the first step when plastic enclosures are received at the contract manufacturer from the molding vendor to check for warpage or knit lines.

   2. An IQC station at the beginning of the main system assembly line where a finished module (speaker, battery, PCB) is received from another sub-assembly line to check for damage, debris, or functionality.

2. OQC (Outgoing Quality Control) focuses on evaluating the quality of finished products at the end of your assembly line. For example:

   1. A final visual inspection station to ensure there are no scratches on an iPhone display.

   2. A functional tester at the end of the line to ensure all switches power on for a PS5 controller.

   3. A fit and dimensional check to ensure the charging cable can be properly inserted into an Anker battery pack.

3.0 Solving the Issue: Root Cause Analysis

Tier 3 is for when an issue slips through detection and prevention controls. How do you solve it? What root cause analysis techniques can be used? There are many tools such as fault tree diagrams, scatter plots, and DOEs (design of experiments). Two of the most practical ones are below.

5 Why Approach

This is a simple but effective problem solving technique for getting to the root cause of an issue by iteratively asking why defects occur. It doesn’t necessarily need to be “5” levels of why. Here’s an example.

Repeatedly asking why helps pinpoint deficiencies in processes, designs, or even attitudes. I like how it encourages healthy skepticism.

Fishbone Diagrams

This is a root cause analysis tool that helps break down a problem into potential categories to help structure a team’s investigation. It helps visualize where the source of the issue could be coming from. Typical categories include materials, method, measurement, environment, manpower, and machine.

Sometimes when you’re working on a complex issue, there can be so many variables that it becomes convoluted. Back when I used to work in automotive product development, I was responsible for root causing an issue that had the highest failure rate on our team’s assembly line.

The failure mode was that a plastic latch component was fracturing as the vehicle’s door was hitting the body. At the time I couldn’t figure out why. I audited the manufacturing line to see if there were inconsistencies with fixtures and jigs. I observed morning and night shift operators to inspect for variance in their process. I confirmed parts were designed to spec from the supplier. After making a fish bone diagram I realized I hadn’t given much thought to the material side of things.

It turns out that the material of the latch had been changed for this batch. The new material had properties with lower impact resistance. It slipped through our design change approval process because the team was under pressure to ship product faster. After running some trials I validated this mitigation with a material swap, reducing the failure rate by 74%. Success. All thanks to the power of visualizing the variables at play.

There are many other approaches to product quality. An entire chapter can be written about reliability (rel) testing for example. That involves breaking parts, drop testing, exposing them to long term cycling, and implementing stressful temperature conditions. Regardless of the method, creating a quality centered product development culture shows pride and craftsmanship. That attention to detail is what builds customer trust.

Interested in more resources for HW PMing?

In addition to our articles on Substack, we offer tailored services in HW PM career growth and HW product development from idea to launch.

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Thanks for reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• Hardware Product Management 🚀

• 5 Books on HW Product Development 📚

• HW Product Requirements Document 🔥

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What comes next after you’ve finalized a new product concept? Is there a document that we can hand off to engineering, factories, and marketing to build out our vision? How do we define a product? Today, we’ll discuss hardware product requirement documents. They’re arguably the most important artifact in your entire product development process.

What’s a HW PRD?

A product requirements document outlines characteristics that make a product successful. Earlier we discussed step 1 of product making where we conceptualize new ideas, strategies, and business cases with PRFAQs. PRDs (step 2) build on that to define the why, who, and most importantly, what. PRDs provide:

• Product purpose, use cases, high-level business cases, and milestones.

• Features and requirements with clear acceptance criteria.

• A source of truth for design, engineering, GTM, legal, marketing, supply chain and more.

• Clarity, constraints, alignment, and reduction in ambiguity.

Unlike software PRDs, hardware PRDs are not living documents. Ideally, they need to be locked before the development phase (EVT onwards), given the incremental cost and complexity of making changes to physical products as builds mature. HW PRDs also encompass a broader scope, including regulatory compliance, certifications, SKUs, warranties, supply chain implications, build regions, and more.

• Step 1 of Product Making: Guide to PRFAQs

• Overall hardware product development process

How to Write PRDs

Here are some general tips for writing good HW PRDs.

• Anchor on user experience as a product manager, focusing on the what, why, and who. PRDs are not engineering spec sheets.

• Keep them as concise as possible while highlighting key information. PRDs get long, and most stakeholders miss important information.

• Major decisions need to be documented, with revisions. Provide rationale for why an important requirement has a certain acceptance criterion.

• Don’t guess requirements, ask your technical teams for help. HW product making involves many domains (RF, electrical, mechanical, firwmware, app, and more) so it’s easy not to know everything, and that’s fine.

• Ensure product vision, strategy, and user demand have been validated before entering the PRD phase.

Now that we've covered some basics, let’s see what this looks like in practice with an example. Imagine you’re a product manager at a smart thermostat company, tasked with defining the PRD for your next flagship product - the HeatSync Pro. Below is how your PRD could look.

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1. Overview

This section should provide your stakeholders with a high-level summary of the program, including things like timing, the business case, regions, SKUs, and northstar success metrics, among other things. What’s also typically listed here is feedback, risks, and approvals from team leads but I’ve omitted that to keep things simple.

• MSRP

  • The price at which customers buy the product. This is different from average selling price.

• BOM

  • Bill of Materials or the cost of components needed to assemble the device.

• LTV

  • Lifetime Value. An important financial metric used to determine the total return from a customer throughout their relationship with a company.

  • HW Financials are nuanced as there’s a lot that goes into calculating LTV other than BOM and build volumes such as tarriffs, shipping costs, tooling, assembly head count, R&D, material attrition, certifications, marketing, and more. We’ll cover this in a separate article.

• SKUs

  • Stock Keeping Unit refers to how many variations of the device there are. This will help retailers and supply chain teams manage inventory.

• CSAT

  • Measures how satisfied customers are with your product.

• NPS

  • Net Promotor Score. Determines customer loyalty and the likelihood of them recommending a product to others.

Product Description

Next, include a compelling summary of the new product. For example:

The HeatSync Pro is a premium smart thermostat that combines climate intelligence with elegant design. Its edge-edge glass screen and machined aluminum housing compliment modern home interiors, while advanced features like multi-room sensing, air quality monitoring, and Siri voice control create a truly personalized comfort experience. Beyond maintaining ideal temperatures, the HeatSyncPro learns your preferences over time, automatically adjusting settings to maximize both comfort and energy efficiency throughout your home.

Concept Images

Include some early industrial design concepts to help contextualize the product to your team with varying angles and placement scenarios. These don’t need to be the final shape or finish.

2. Use Cases

List the target customers and their key use cases to help development teams stay focused on real problems, not just specs. Continually revalidate these use cases throughout all alpha and beta testing phases to ensure the product delivers value.

3. Features

A clean features list with rationale is a must for PRDs. Try to articulate why a feature is important and include any data to justify it such as user studies, satisfaction scores, market trends, or industry tech advancements.

It also helps to add a feature comparison table to provide background information. The table can be a mix of other products that your company or competitors offer. For example, the HeatSync Pro is a premium product but say your thermostat company also offers mid and entry-tier products. Laying options out like this can justify requirements or provide insight to engineering to use reference designs or modules.

4. Product Requirements

Product requirements will be used as an input by design, engineering, and maufacturing teams to develop the product. Let’s go over some definitions.

• Requirement

  • Specific need, feature, or capability that the product must fulfill.

• Description

  • An explanation of the requirement to add user context and clarify intent.

• Acceptance Criteria

  • Specific conditions that must be met for a requirement to be ready for launch.

  • Constraints lead to great design. Requirements without criteria are just wishes.

• Priority

  • P0: Critical, must have requirements that must be ready for product launch.

  • P1: High-priority requirements that are not blockers for launch.

  • Assume all requirements in the examples below are P0. A P1 requirement could be something like Alexa integration. It’s important for customers but not a showstopper for launch because we already have Siri.

4.1 Mechanical and Industrial Design

These define the physical structure, look, and feel of the device.

4.2 Electrical Design

I’ve decided to keep the device mains powered for simplicity. Consider that a battery adds layers of complexity such as meeting user battery life expectations, thermal considerations, safety, and layers of certifications. Despite this, if your device needs to be portable then battery power requirements are items such as capacity, energy density, charge/discharge rate, and more.

Another tip is to not specify how the technology should be executed. For example, I’ve listed an occupancy sensing requirement but didn’t list the type of sensor (PIR, radar, TMOS, etc.). That’s for engineering to recommend.

4.3 Reliability

I typically don’t like specifying Reliability requirements in a PRD because it often turns into a test plan, which as stated above, is not the point of this document. Things like long-term heat soak, vibration, temperature cycling, aging, and more should be captured by quality engineers. However, there are still some elements fundamental to a good, robust user experience that need to be made explicit. They are outlined below.

4.4 RF

This is how your device will connect to the internet, apps, and companion devices. RF is an important part of device design and has a notable impact on cost due to its relationship with SoC (system on chip/processor) selection.

Set requirements based on speeds, throughputs, and ranges for your use cases, not on the latest protocol. For example, if you have a portable battery-powered device consider that Wi-Fi is power intensive and it may be better to leverage low-power RF like Bluetooth whenever possible.

Another example is that you may not need dual-band Wi-Fi if it’s a device that just connects to the internet and doesn’t require high data transmission (such as video streaming). In these cases, 2.4 GHz would be fine, and simplifies things.

Lastly, while they’re not listed in this PRD, metrics should be defined such as target throughput, signal strength (RSSI), and % of devices falling offline.

4.5 Certifications

Certification planning is based on which region the device will be sold in as there may be different regulatory requirements for each country. These typically focus on safety (thermals, mechanical, electrical), RF interference, EM noise, hazardous substances, and much more. The table below is not a complete list but should serve as an intro to what types of certifications would be required for a premium smart thermostat. Always confirm these with your reliability, compliance, and test lab teams.

4.6 Packaging

Packaging is the first physical element a user interacts with. Attention to detail matters here as a frustrating unboxing experience, low-quality images, or flimsy structure may cause distrust in your brand.

4.7 Firmware

Firmware requirements are usually better served in an engineering spec sheet, because they are implicitly covered in other PRD sections such as electrical, RF, security, and app.

4.8 App

An app section on a PRD can get pretty long. Because this is building hardware and because so many other articles already cover software PRDs, I’m not going to list app requirements here. However on a high level look for user experience considerations, device setup flows, navigation, and integrations. For our smart thermostat that means requirements to define how customers will seamlessly be onboarded, how they can change temperatures, monitor energy usage, receive AI routines, get air quality updates, and interact with Siri.

4.9 Security

Look to define items like like encryption for customer account information and passwords, secure boot, memory access control, tamper protection, data collection policies, and more.

4.10 Warranty

List the length of warranty coverage (usually 1-2 years), start point (date of installation vs sale), conditions (proper usage, proof of purchase), and scope of coverage (manufacturing defects, performance issues, etc).

4.11 Lifecycle

Plan out when the device will become obsolete, what concessions need to be offered to customers (if any), inventory depletion, and next-gen roll-in timing. Milestones to consider are the end of manufacturing date, end of sale timeline, and end of official support as some devices may continue to function for a certain amount of years even after you officially stop selling them.

In Closing..

There are plenty of other sections we can include like legal requirements, user journeys, and performance metrics. However for now we’ll wrap it up here.

Over the years I’ve found that its important to stick to a template and hope this article helped clarify the core components of a hardware PRD. If you have your own tips, approaches, or best practices, feel free to share them in the comments below. I'd love to hear how others tackle this process.

Interested in more resources for HW PMing?

In addition to our articles on substack, we offer tailored services in HW PM career growth and HW product development from idea to launch.

Get In Touch

Thanks for reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Product Market Fit for Physical Products 📈

• Step 1 of Product Making: PRFAQs 📝

• Hardware Product Management 🚀

• 5 Books on HW Product Development 📚

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I recently caught up with a friend whose hardware startup had just generated meaningful sales.

This also coincided with requests from our reader survey in which more of you want to bring on hardware professionals to learn from their journey. There were also requests to discuss product market fit (PMF) in the physical devices space. Hence, this month I’m going to kill two birds with one stone and experiment with a new format.

Today we’ll be diving into an interview with Farhan Hossain about PMF. Farhan is an ex-Apple product design engineer who is now involved with various hardware startups.

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What is PMF (Product Market Fit)

Before we dive into the interview, let’s get a quick refresher on PMF. PMF is generally when demand has been validated for a product. Achieving PMF varies with some companies taking a few months, while for others it could take years. It’s also fluid given that it can be strong during some periods and weaker in others. While it isn’t easy to quantify, there are some directional indicators that your product solves a genuine need.

• Positive feedback

  • Customers are delighted, issue pre-orders, and use your product even if it’s not fully polished.

• Organic growth

  • Users automatically tell friends and family about your product, exponentially increasing sales.

• Retention

  • Customers keep returning and are engaging in high usage patterns.

• Low adoption of alternatives

  • Users are loyal to your brand, signaling that it may have a unique value proposition and competitors aren’t addressing needs effectively.

A lot can be said on this topic but I’ll leave that to experts. Check out some fantastic guides below for further reading.

1. How to know if you’ve got PMF (Lenny)

2. PMF Experience and Data (Asmartbear)

3. Playbook for achieving PMF (Leanstartup)

PMF for Physical Products

As we’ve discussed earlier, HW product development poses unique challenges. The guides above are great for software however, there are some barriers that digital products just don’t come across like:

• User Education

  • For HW, landing pages and images are not enough. Users need to see, feel, and interact with your product. This friction makes us more likely to lose users.

• Delayed User Feedback

  • We can’t just press a button for A/B testing results. We need to fabricate physical samples, ship them, and wait for real-world impressions.

• Timelines

  • Everything takes longer - prototyping, detailed design, and validation.

• Lower Margins

  • Think of BOMs (material cost), assembly head count, tariffs, shipping, & tooling.

• Manufacturing & Supply Chain

  • Sourcing components, developing partnerships with vendors, and scaling unit volumes is incredibly complex.

Check out our previous post on hardware vs software product development for more info.

Interview with Farhan on PMF for Physical Products

As mentioned above, Farhan’s worked on a variety of HW products. He started his career in Apple’s technology development group and then transitioned to the startup realm as the head of hardware (ME/EE) for a computer vision sports coaching machine (Hoopfit).

However, his recent endeavor Side Note is why I wanted him on the newsletter. It’s because it’s a relatively simple yet effective product that many of us can take lessons from. Side Note is a MagSafe pocket notebook that Farhan conceptualized, designed, and then sold thousands of units in a year as a solo-preneur.

I usually share case studies in this newsletter on corporate product successes, but I think it’s also important to spend some time on more tangible examples that are accessible to those of us who don’t have millions of dollars in company budgets.

Most of us have physical product ideas that we want to see to fruition. Maybe we want to switch from our 9-to-5s to entrepreneurship. But there are many questions around validating user demand, what the journey is like, associated costs, and ultimately how to achieve PMF.

🤔Interested in learning 0-1 HW Product Management?

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We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

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Intro

1. Can you talk to us about your background?

FH: "I've spent my career as a product design engineer, more so in mechanical engineering and hardware development. I've had the chance to work on some really exciting projects. Everything from helping develop the Vision Pro at Apple, to creating AI sports coaching HW tech with Hoopfit, to building productivity tools like Side Note. Along the way I've picked up over 50 patents and built several startups from the ground up.”

2. What was your favorite experience?

FH: "Each of these projects was really different and taught me a ton. At Apple, working on Vision Pro was honestly incredible. I got to work with some of the best engineers out there on cutting-edge spatial computing stuff. Then with Hoopfit, that was actually super fulfilling because we got to blend AI and computer vision with sports coaching, helping athletes get better. But Side Note was probably the most rewarding for me personally. I actually built that one from the ground up - figured out if people wanted it, designed it, manufactured it, and we ended up selling over 1000 units in just a year.”

3. So you’ve worked on some very sophisticated HW at Apple and Hoopfit. Why did you pursue a simpler product idea with Side Note?

FH "I chose Side Note because I realized something important. And that is that execution matters way more than complexity. Simple products are easier to explain and sell. And they can usually have great margins with much lower risk. My advice would be to keep things simple, especially at first. Those complex products might seem more impressive, but they need huge funding and can take years to get right. Start simpler, learn the ropes, and then you can tackle the bigger challenges.

I also wanted to create something that solved a problem for me, which happened to be the need for a simple pocket notebook. I am often in situations where my phone notes dont work, for instance on factory floors I need to leave my phone with security. Sometimes I am in medical facilities or very dirty environments like machine shops where I rather use a pen and paper.

⁠Finally I didnt want to build another gadget or gizmo to just sell because it was cool. I wanted to make something meaningful, and long lasting. If I worked on some tech (especially as a boot strapped company), it could be obsolete soon. I wanted to focus on that timelessness of the product, and far reaching use."

User Demand & Feedback

4. How did you know the problem you were solving with Side Note was significant enough to pursue?

FH: “I tried to find out if other people also had this problem. I mean literally typing things into Google, asking questions in forums, talking about it in communities. If they're doing that, there's something there. With Side Note, I kept seeing this frustration with regular notebooks. People loved taking notes but hated the friction involved of carrying either bulky or flimsy notebooks. Our design basically removed all those barriers to just getting your thoughts down instantly."

5. How did you validate user demand for Side Note?

FH: "I've learned you really need to try a few different approaches. What I've found works really well is to start with a simple landing page and run some ads. This gives you a quick way to see if people are interested enough to pre-order. Kickstarter can be pretty useful too for early validation, but I'll be honest you've got to be really careful about managing the fulfillment side of things.

What's actually worked best for me is building up word of mouth and getting the community involved. When people are excited about your product and telling their friends, that's when you know you're onto something real. And if you're selling to businesses, I've found that running pilot programs with a few companies early on can tell you pretty quickly if there's real demand there.

Like with Side Note, we used a mix of everything. We got some pre-orders going, watched the organic interest grow, and paid close attention to what people were saying on social media. That really helped us feel confident before we went all-in on production.”

6. Many HW companies face the challenge of user education. People need to interact with the product before they can trust you. How’d you overcome that?

FH "Selling hardware online when people can't touch it is tough, but we found some tactics that worked. Video demos and GIFs were huge. Showing the product in action answers alot of questions.

Influencer marketing was also super effective for us. When someone trusted shows your product working, people believe in it. We also had a solid trial and return policy to reduce hesitation. And eventually, we got into some retail partnerships so people could actually see and feel the product before buying.”

7. How can hardware startups test MVPs early in the dev process? You can’t just run A/B tests like an app

FH: “Hardware is pretty different from software. Like you said you can't just push updates whenever you want. You've got to deal with actual physical stuff like cost, picking the right materials, and figuring out what you can actually manufacture. But there are some really good ways to test things out before going all in. What I actually like to do is start with what we call 'Wizard of Oz' prototyping - basically, you build something that looks like the real thing but maybe you're doing some of the features manually behind the scenes.

Then what I've found works is getting your prototype in front of a small group of early adopters. These are the people who are excited about what you're building and will give you honest feedback. You just learn so much by watching real people interact with your prototype."

8. How did you get prototypes in users’ hands?

"What we actually did was start with just a handful of really solid prototypes. Then we just started passing them around to different people. I'd send one to a reviewer, get their thoughts, then pass it to a friend, and then to someone who might actually buy it. Instead of making a bunch of units right away, we just kept cycling these few prototypes around and collecting all this feedback. It was pretty eye opening to be honest. Seeing how real people used it and what they struggled with really shaped our final design. I remember making tweaks after almost every person who tested it. For example, we improved the ergonomics after seeing how people held it. We had to adapt the magnet strength, and noticed people needed some slight guidance on how to take the pen out of the booklet since it was such a new experience”

9. What did you learn about your users that you didn’t know before?

FH: "Before we started selling Side Note, I was totally convinced people would just use it for productivity. But a ton of people were actually buying it as a gift - they loved how premium it looked and felt. Then we started hearing about all these uses I never even thought of. People were using it for daily affirmations, journaling, and creative writing. There was also an instance of a truck driver talking about how it helped him with his delivery routine, which was neat. Another demand that I didn't expect was that people kept asking if we could make it refillable. So we ended up creating that as a new version.”

Product Development

10. What was your product development process?

FH: "Our process was pretty straightforward. We started with concept sketches, then moved to 3D modeling and making physical prototypes. Like I said earlier, early testing was crucial. We got insights that completely changed our direction. After those iterations, our design was locked and we prepped for manufacturing. Next we got our tooling sorted, did a small batch production to work out any kinks, and then finally launched and started scaling. The key was being methodical but not getting stuck at any one stage."

11. Can you share some lessons on finding a manufacturing partner?

FH: "What worked for me was visiting factories whenever I could. If you can't visit in person, you have to do your homework. Start with small batches before you go all in . This will save you from alot of headaches. Also get everything in writing with clear quality standards.

Don't just go with the cheapest option. I tried that and the quality was terrible. Really check out your manufacturers because some will promise you the moon but can't deliver. And always have a backup supplier. Things go wrong.”

12. What are the typical costs for a HW startup?

FH "It really varies on your product but here's what I've typically seen: For prototyping, you're looking at $500 to $5000, depending on complexity. Tooling is where it gets serious. Anywhere from $10,000 to $100,000 or more if it's really complex. Small manufacturing runs usually start around $20,000 minimum. Marketing can range from $5,000 to $50,000 to get the word out. It adds up fast, which is why you need to be really confident before you go all in.

But if you keep things simple and focus on prototypes for testing, filming and first-adopters, you can focus your budget on marketing, which is more important. I would split it like: (1) $100-200 for simple renders and mockups, 3D printed visual prototypes for market validation (2) $200-500 for early marketing and market validation (3) $2,000-5000 for all prototypes plus shipping (for a Side Note type of product, can be much more expensive if its a complex product) (4) $10,000-20,000 for pre-sale marketing (crowdfunding or your own), try to pre-sell at least 100 to really get a sense of the buyer, the persona, etc and (5) $X- manufacturing first batch - depends on quantity."

13. What are some tips for our readers who are overthinkers and delay execution?

FH: "Its different for everyone but I've found setting a hard deadline is crucial otherwise you'll tinker forever. You've got to be ruthless about limiting feature creep too. Ask yourself: 'Is this really essential?' Like I said earlier, the biggest thing is getting it in front of actual users as quickly as possible. Their feedback is worth ten times what you'll figure out on your own. And whenever you can, use off-the-shelf parts. No need to reinvent the wheel for everything. You just have to start.”

Selling

14. How did Side Note sell 1000 units so quickly?

FH: "I think a few things really helped us get there. First off, we solved a real problem. People were frustrated with how they took notes. They needed something faster, something that just worked.

What really made a difference was how we positioned it. We didn't just make another notebook. We really thought about the design, made it premium, and made it something people would actually want to use every day. For marketing, we kept it pretty straightforward. Got it out on social media, connected with some influencers who actually loved using it, and built up this community around the product.”

15. What was your most successful customer acquisition method?

FH: "We tried to focus on organic as much as possible. Happy customers sharing on social media. That stuff is gold because people trust other people way more than they trust ads.

We also did these strategic partnerships that worked well. We got featured in these niche newsletters, specialized blogs, and curated gift guides. And when we did run ads, we were super targeted. Instead of just blasting them everywhere, we zeroed in on exactly who would love this product.”

16. What was your revenue model?

FH: "IMO with hardware, subscriptions rarely make sense. We went with a straightforward upfront purchase model. But we created opportunities for repeat business through refills and accessories. That was actually pretty key.

We kept a close eye on how engaged people were by tracking reviews, talking directly with customers, and monitoring how often they came back to buy more stuff. This gave us a pretty good idea of how sticky the product was."

17. What’s your take on fundraising vs bootstrapping?

FH: "Hardware is expensive, no question, but bootstrapping has some real advantages. You maintain control and ownership. You're forced to spend money wisely. And you build for profitability from day one.

That said, if you need to scale quickly, VC money might make sense. What actually worked well for us was this hybrid approach - using pre-orders, applying for grants, and exploring crowdfunding. It gave us capital without giving up too much control. VCs tend to want to see enormous growth, like a 10-100x multiplier on their investment. Depending on your goals and vision, you will need to convince yourself and the VC that this could happen in the next 5-10 years.”

Thanks for Reading

This was the first time we’ve tried an interview format, so let us know how it was. If there are other examples of HW products or topics you want a deep dive on, feel free to suggest them.

As we’ve seen from Farhan’s experience, achieving PMF in HW requires getting units in users’ hands early, often, and then iterating on feedback. It also teaches us to have bias for action and that moving forward with something is more important than a grand, sophisticated idea. Even simple products can achieve success through a bit of planning and relentless execution.

Connect with Farhan through his LinkedIn here.

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Designing for Delight vs Pain 🔥

• Hardware Product Management 🚀

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, like and spread the word.

Subscribe now

Share

What if I told you that your dream product idea can be validated with a bit of writing? I’ve often been asked how to start planning for a new physical device concept. By planning I mean the strategy, vision, and ideation before engineering gets involved.

Luckily, there’s a method to do this. While there are many guides on crafting such documentation for software, some of the best-selling hardware in recent years, such as Amazon Kindle and Google Nest, have used this mechanism as step 1 of their product development process.

Today we’ll talk about PRFAQs and cover:👇

• What they are

• Why they’re important

• How to write PRs that excite

• How to craft FAQs that gauge concept viability

• Challenges

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

Join the Waitlist

What is a PRFAQ

In Tony Fadell’s words (ex iPod, iPhone chief), a press release FAQ is a document drafted at the inception of a new product endeavor. It answers the what, why, and who.

• It starts by working backward from the customer experience and provides a clear vision for the team.

• It’s a guide that outlines a product’s target users, key features, and most importantly - the problems it solves.

• It facilitates communication between product, marketing, design, and engineering.

• A good PR creates excitement and helps the team prioritize development efforts.

PRs are among the most critical artifacts drafted by product managers. In some organizations, PRs are also considered business plans because they outline the strategy for making a successful product. They also contain FAQs that answer important questions on demographics, competitive market analysis, technology feasibility, operations, and financials.

How to Write PRs

Generally, PRFAQs should focus more on product vision than technical execution. They should bring a concept to life, create excitement, and inspire action. However, it’s also an iterative process and while there is no single format most PRs have the following elements:

• Headline

  • This should be a clear, compelling statement that communicates your product’s core value.

• Subtitle

  • An extension of the headline that adds exciting context, usually highlighting the key feature or a one-line summary of the product.

• Summary paragraph

  • A 3-4 sentence overview of the product and opportunity, similar to an elevator pitch.

  • Assume that your audience doesn’t have time to read the entire PR. Hence this summary will probably be the most important part.

• Body

  • This is the meat of the press release.

  • It establishes customer pain points with examples and data.

  • Introduces your solution, how it works, and why it’s important.

  • Use pictures and sub-sections to accentuate key features.

• Company leader quote

  • Quote from a key executive that strategically reinforces the main value prop while adding credibility.

• Customer quote

  • Humanize the situation and show a real-world use case that validates the problem and demonstrates how your product is meaningful.

• Call to action

  • Next steps for customers such as where they can learn more, purchase, or engage with your product.

• Tenets

  • These aren’t formally part of the press release but should be referenced in the doc.

  • Tenets are core values that guide decision-making in times of tension or ambiguity.

Example Press Releases

• Google Nest Smart Thermostat

• Apple Watch Ultra

• Original Amazon Kindle

• Rivian R2, R3

Customer and Stakeholder FAQs

FAQs are a list of questions that both customers and internal stakeholders will ask about the product. These are designed to anticipate concerns and mitigate risks. Although the FAQ section is the toughest to write, completing this saves time downstream in the product development process. Writing them upfront demonstrates a deep understanding of the business and is a mature product-building practice.

A sign of a good PRFAQ is that it makes the PM reconsider product ideas. It’s not uncommon for some teams to realize the idea just isn’t viable from a business or technical perspective. That’s a win. You just saved your organization a lot of capital and resources. It’s an even bigger win in hardware, with the cost of development exponentially increasing with each phase such as tooling, production lines, machinery, certification, and testing.

Customer FAQs

Are a set of questions that users may ask to understand the product during their purchase journey. Let’s walk through an example. Say we’re an audio company called SmartWave and are developing a new smart speaker. What are the immediate questions our customers will ask?

• What is this product?

  • The SmartWave Speaker is your voice-controlled hub for an intelligent home. Enjoy high-fidelity audio while seamlessly controlling compatible smart devices, accessing information, setting reminders, and more through its advanced AI assistant. The speaker’s uniform design and powerful speaker system deliver a premium audio experience that integrates into any room.

• What are the product’s key features and how do they work?

  • Crystal-Clear Sound: Enjoy premium audio quality for podcasts and more.

  • Effortless Smart Home Control: Seamlessly connect and manage your smart home devices with your voice.

  • Powerful AI Assistant: Get answers, check the weather, and much more – all hands-free.

  • Intuitive Touchscreen: Visualize information and access interactive features.

  • Privacy First: Easily control microphone access for your peace of mind.

• How is this product different from the previous generation?

  • The SmartWave Speaker features enhanced sound quality with improved bass response, a first-ever touchscreen display for interactive feedback, and faster/accurate AI voice recognition that intuitively learns your routines.

• Where can I buy the product?

  • Our speaker is available globally through our official website, amazon.com, and Walmart.

• How will the product be priced?

  • The SmartWave speaker is available for $149.99 and also features a $4.99 monthly subscription for access to our ecosystem.

• Is there a warranty?

  • Our products come with a 1-year warranty and free software updates.

A good reference of what to anticipate in customer FAQs can be found by looking at Amazon detail pages. They include product descriptions, features, pricing, and warranty info all in one spot.

Stakeholder FAQs

Are a set of questions from your development teams such as marketing, engineering, design, and legal to gain context into the new product concept. Anticipating these early is a good exercise to drive alignment and gauge feasibility.

• What problem does the product solve?

  • Why are you building what you’re building?

• Who are our target users?

  • Have 3-5 user personas.

  • List demographics, age ranges, income, spending habits, & needs.

• Has customer demand been validated?

  • List all data points to confirm customers are interested in pursuing this product. Given this is the pre-prototype stage it is ok if the data is not perfect. However, it does have to be directionally indicative of trends.

  • Include feedback from surveys, interviews, reviews, and workshops.

  • Try to find tangential products to get concepts in people’s hands. Real-world usage feedback is key for hardware businesses.

• What are the industry trends?

  • YoY growth, new technologies, consumer behavior, regulatory changes, and economic factors.

• Is there a competitive analysis?

  • Make a table of 3-5 competitor products vs your product. List key features (HW, SW, app), customer ratings, pricing, differentiators, strengths, & weaknesses.

• What is the financial analysis (FA)?

  • Is there business viability in pursuing this opportunity? Hardware product FAs are very nuanced so this will be covered in a later article. At a high level include:

    • Pricing strategy (one-time vs subscription).

    • Costs for BOM, tooling investments, non-recurring (NRE) engineering, certifications, shipping, tariffs, assembly, material attrition, & headcount.

    • Estimated returns, reverse logistics, discounts, & concessions.

    • Gross margins, net margins, profit-per-unit, Lifetime Value (LTV), & ROI timeline.

• What is the value proposition?

  • What utility does it provide target users? What makes it unique versus alternatives?

• What is our positioning?

  • How do we want our product to be viewed by users relative to competitors?

  • Positioning statements can be used to guide product communication and marketing.

  • Template: For [target users], who are frustrated with [existing solutions], our product is a [product type], that delivers [main value prop], unlike [competitor], we offer [additional unique features].

• What is the operations plan?

  • Regions sold, SKUs, manufacturing, bundles, supply chain strategy, and distribution channels.

• Is this Technically Feasible?

  • Engineering General

    • Engineering will become more involved in the PRD phase when requirements are further defined however early technical feedback in the PRFAQ phase is invaluable.

    • Look for conceptual insight and leverage demos, mockups, or prototypes wherever possible.

  • Electrical/Firmware

    • Include any high-level system architecture plans or block diagrams.

    • For the smart speaker example, you can have rough chipset discussions on processors, audio codecs, speaker modules, amplifiers, power type, and RF modules.

    

  • Mechanical/ID

    • Include feedback on items like weight, strength, materials, & manufacturability.

    • Add any early industrial design concepts.

      

  • App/Software

    • High-level discussions on experiences for setup, integrations, UI/UX, engagement, privacy, and security.

  • Challenges

    • Think of the main user experiences and talk to engineering about associated risks. Some examples of challenges with the smart speaker are brainstormed below:

      • SW/FW: Is our ML model efficient enough to fit on the device or will we need to access the cloud? How accurate is our model for voice recognition? What types of classification needs to be done?

      • HW/FW: To enable the AI assistant, does our chipset allow enough edge computing from a processing and memory POV to reduce latency? If not, how expensive are alternative chipsets?

      • Mechanical: Can our ID withstand thermal risks if users are based in Arizona or Texas? Can the weight of this device resist drop testing?

      • Electrical: If it’s battery-powered, how much will Wi-Fi degrade battery life? Should we switch to low-powered RF like Bluetooth for connectivity?

Finishing the PRFAQ

After all of the above is completed take the PRFAQ and share it with as many people. A good PRFAQ process drives discussions and has to be re-written. It’s okay if it gets beaten up. That’s the whole point.

Some More Thoughts

PRFAQs are not perfect. There are scenarios where they might not be the best for your product. The most common criticism is how long they take to write. Some PMs spend months researching and still have to revise several iterations based on each round of stakeholder feedback.

The counter to this is that they should take a while to write. PRFAQs are technically a business case and should be treated meticulously to validate a product’s feasibility. Doing the work upfront will save your team hours because a lot of questions will have to be answered anyway such as financials if doing pitch decks, use cases when drafting a PRD, or BOM constraints when defining the engineering spec.

A practical solution is writing a PRFAQ-lite. This is a hybrid document that is a concise version of typical PRFAQs. It balances speed and clarity by focusing only on priority FAQs. It can be used for quick feedback from stakeholders.

Personally, the most important outcome of a PRFAQ is that it inspires deep thinking. It forces us to critically test our assumptions and mitigate risk.

Building hardware is technically and financially complex, hence the work needs to be done upfront to gauge robustness. Sometimes I wonder if companies like Humane or Juicero wrote PRFAQs before selling such disappointing products.

Thanks for Reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Designing for Delight vs Pain 🔥

• Hardware Product Management 🚀

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, like and spread the word. If you have any questions on hardware PMing, product development, or careers let’s talk.

Subscribe now

Share

Previously we’ve talked about the hardware product development process which takes an idea from concept to launch. But what about before that? How do companies develop innovation processes and new technologies which serve as a precursor to product development?

Before the iPhone we needed touch and camera technologies to be ready for productization. Before the Vision Pro, Apple spent almost a decade developing display technologies to achieve a high resolution, small form factor. Before Tesla became mainstream, EV batteries had to be capable of sustaining range and thermal conditions.

Today we’ll be covering 👇

• Vision or reasons for innovation

• Types of innovation

• Technology development process

  • Ideation

  • Alignment to customer/technology themes

  • Prioritization

  • Testing

1. Vision

Innovation is a means to an end and doesn’t happen in a vacuum. It grows in process driven environments and is a team endeavor. In other words it’s a multi variable outcome which happens with intent and structure, contrary to the lone inventor myth.

This typically starts by companies defining strategic goals, or why they need innovation. If the vision is not articulated or the r&d activities are not serving a specific goal then time and effort will be misdirected. Stephen Wunker in the Innovative Leader talks about some applications below.

Use Cases for Innovation

• Industry trend anticipation

• New technology response

• Inefficiency improvements

• Cost reduction or revenue generation

• Company culture or branding enhancement

Traditional Ways to Measure Innovation

• Technology development

• Patents

• New product releases

In this article we’ll be focusing on the technology investigation side of things. However before diving in, it’s worthwhile to understand the technology s-curve. This is a model that illustrates how technologies mature in the market.

1. Birth Phase: Is characterized by slow development, delayed adoption, and high cost due to poor understanding of the technology’s value.

   • Ex: Lead-acid batteries used in the first electric vehicles which were limited in range and performance.

2. Growth: Is when adoption speeds up and enhancements are made such as reduced cost and performance improvements.

   • Ex: Advancements in lithium-ion battery technology led to gains in range, affordability, and efficiency for the industry.

3. Maturity/Decline: Is when the technology becomes a market standard and reaches a point of saturation, slowing growth.

   • Ex: Current day batteries focusing on improving recycling processes and energy density.

2. Types of Innovation

Among the many types of innovation, there are three which are particularly relevant to physical product development.

1. Roadmap Innovation: Evolution of products from one generation to the next to stay competitive, like making them faster or lighter.

   • Ex: Improved ergonomics and haptic feedback on Playstation’s DualShock controllers.

2. Breakout innovation: Significant changes which alter an existing product category, usually having a major impact on the industry.

   • Ex: Dyson’s bagless vacuum cleaners which, through cyclonic technology, offered significantly better suction and efficiency. This changed the vacuum industry.

3. Disruptive Innovation: Technologies which create a new product category or market.

   1. Ex: Google Nest’s thermostat which introduced a smart device that learns users’ habits to optimize HVAC energy usage and enhance convenience. Other examples are Uber and Tesla.

3. Technology Development Process

Idea generation is typically not the bottleneck. Most organizations have no shortage of ideas. But what prevents them from innovating is lacking systematic frameworks to nurture these ideas to fruition.

A good technology introduction process needs to allow for fluidity, iteration, risk taking, ambiguity, and complexity. It also requires input from diverse stakeholders - product, design, operations, legal, marketing, and engineering.

Stage 1: Ideation

We start with inputs, which are basically new ideas. They usually come from three sources.

Academia

A timeless source of new ideas has been through universities. This is from professors, researchers, or scholars that provide new scientific or technical knowledge.

An example is Dr. Gierad Laput, who prior to creating machine learning technologies for products at Apple, published several academic papers comprising of sensing, gesture recognization, and human-computer interaction.

He later worked on productizing key new technologies into Apple devices such as activity recognition, crash detection, and hands free interaction on Apple Watches and AirPods.

However the reality is that most of the time academia lags versus the industry given that companies have incentive to productize, determine technology robustness, and move quickly. This is why firms usually hire professors as research or applied scientists.

Structured Activities

Companies like Meta run periodic hackathons while some teams at Amazon have internal incubators for new technology investigations. Competitions, innovation committees, accelerators, and internal start-up programs allow firms to foster creative environments for new ideas.

Some organizations even encourage their employees to take a portion of their time (15-20%) for brainstorming in areas unrelated to their current work assignment.

Friction

Friction is the most organic source of idea generation. Examples include:

• Resolving inconsistencies or frustrations within a process or product

• Failure in one domain but same concept being applied to another

• Changes in perception or industry popular opinion

Stage 2: Align and Review

As mentioned above, ideas can’t be pursued arbitrarily or in isolation. They need to be aligned with key areas of interest which intersect with a company’s strategy. Two major themes are customer experience and technology roadmaps.

Customer Experience

These are themes which enhance user experience, provide customer delight, and are critical towards solving pain points that are aligned with company vision. Some industry examples include:

• Wearables

  • Comfort and fit: Developing ergonomic, lightweight solutions that accommodate longterm use.

• Automotive

  • Range anxiety reduction: Maximizing longevity of EV batteries.

• Consumer Electronics

  • Intelligent updates & privacy: Reducing notification fatigue ensuring robust data protection.

• Smart Homes

  • Frictionless home activity updates: Offering latency free access and interoperability with multiple sensor, camera, and device feeds.

Technology Roadmaps

There are various technology categories which companies see as advantageous to invest into. These include, but are not limited to: audio, sensing, biometrics, displays, batteries, materials, recycling, edge processing, and more. Some industry examples:

• Wave guides

  • Some of the most sophisticated technology is in augmented reality waveguide development. Think of waveguides as display systems. They’re optical components that direct light from a display into a user’s eyes by refracting it through a serrated lens. They’re critical for designing slim, light AR glasses.

    

  • Wave guides have existed for years but have only recently been on the path to mainstream productization.

  • Technology development studies in this area include materials design (plastics, glass, coatings), micro-structure engineering, light coupling enhancements, FOV improvements and more.

• Multi Modal Sensor Fusion

  • This involves the integration of various sensing modalities (audio, cameras, motion, PIR) to lower HW costs and improve detection accuracy using ML.

  • For example, combining microphone, accelerometer, and video input from smart home devices to confirm which door was opened, and who opened it.

  • Another example is in smart wearable devices where sensors like accelerometers, temperature, and ECG are used to determine physical activities (walking, running, sleeping) and monitor health.

  

• Computer Vision

  • CV enhancement will be a key technology theme for many companies that use cameras. Think smart homes, automotive, security, and inspection.

  • Smart home companies will need to improve facial recognition algorithms to recognize home owners vs visitors in various lighting conditions while integrating anonymization techniques to protect privacy.

  • Another application will be deep learning models to detect and classify activities like package deliveries, suspicious behavior, or animals playing.

Stage 3: Prioritize

The next step, as Wunker and co describe in the Innovative Leader, is that companies need scorecards to holistically and objectively prioritize ideas given the finite nature of time and resources. A simple example template is shown below with criteria and stop light colors for each.

Stage 4: Test

The last, and sometimes longest, step prior to exiting from a technology development process into a product development process is to vet out the selected tech using a series of experiments, tests, builds, and prototypes. The goal is to validate feasibility.

A great example of this is mentioned in the Vanity Fair, where we get an insight into Tim Cook’s impressions of the Vision Pro long before it was productized.

Note the level of new technology investigations that had to be completed prior to packaging the device into its final form factor. One instance is engineering micro-OLED displays to fit 23 million pixels in front of a user’s eyes. Others are captured by the 5000+ patents and 7+ years of development.

Also consider how the early demos look drastically different than the final commercialized product.

“Mike Rockwell, vice president of Apple’s Vision Products Group, is there when Cook enters and sees it. It’s like a “monster,” Cook tells me. “An apparatus.” Cook’s told to take a seat, and this massive, monstrous machine is placed around his face. It’s crude, like a giant box, and it’s got screens in it, half a dozen of them layered on top of each other, and cameras sticking out like whiskers. “You weren’t really wearing it at that time,” he tells me. “It wasn’t wearable by any means of the imagination.” And it’s whirring, with big fans—a steady, deep humming sound—on both sides of his face. And this apparatus has these wires coming out of it that sinuate all over the floor and stretch into another room, where they’re connected to a supercomputer, and then buttons are pressed and lights go on and the CPU and GPU start pulsating at billions of cycles per second and…Tim Cook is on the moon!

…..What Cook didn’t know is how his engineers were going to take this thing that needs a supercomputer in another room, and fans and multiple screens, and shrink it down to the size of a pair of goggles that weighs a little more than a box of spaghetti. “I’ve known for years we would get here,” Cook told me. “I didn’t know when, but I knew that we would arrive here.”

After all of the above comes step 5, a formal exit from the technology development process into the NPI (new product introduction) process. In reality, while only a few ideas make it all the way through, it’s important to not feel discouraged.

An inspiring team is Google X or Google’s moonshot factory which is an innovation lab that focuses on solving complex problems with audacious technologies. While they’ve had some massively successful productization examples like Waymo (self driving cars) they’ve also had a considerable amount of failures.

Sometimes the industry is just not ready for the technology (like Google glass at the time) and that’s just a part of the journey.

Thanks for Reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Designing for Delight vs Pain 🔥

• Hardware Product Management 🚀

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, like and spread the word. If you have any questions on hardware PMing, product development, or careers let’s talk.

Subscribe now

Share

Hey Friends 🖐️,

Imagine being in China during covid lockdowns. You’re in a room for several days and aren’t allowed to open the window. Your only contact with people is when someone in a hazmat suit knocks on your door for temperature checks. Also imagine taking kidnapping training prior to visiting a dangerous part of Mexico.

Well I’ve been in both of those situations and hope you don’t have to go through the same to learn about developing suppliers. Over the years I’ve worked with manufacturing partners in Europe, Asia, and the Americas. I recognize that there aren’t many resources for learning about how to source factories to make a product go from prototype to mass production.

In today’s post I’m going to try to distill almost a decade of experience in working with automotive, aerospace, consumer electronics, and energy product manufacturers.

We’ll be covering:

• Key terms in Supply Chain

• Low Cost Country Souring

• Contract Manufacturing Assessments

• RFQs

• Factory visits

• Supplier Selection and Development

What’s a Supply Chain?

Before we dive into contract manufacturing let’s step back and understand the bigger picture. Every physical product we use has a supply chain.

• Think of supply chains as a giant network of people, services, organizations, and materials which transform raw materials into a finished product.

As users and even creators, sometimes we take the size and complexity of these for granted. I like to give some examples from automotive and consumer electronics given that we use these products regularly.

There are thousands of parts in cars which are globally shipped from suppliers, and sub suppliers, that converge at a final assembly line. For instance, the airbags may come from Autoliv in Utah, body panels from Kirchoff in Ontario, glass from Fuyao in China, control systems from Bosch in Germany, and so on.

We see an analogous theme in consumer electronics. Below is an excerpt from a Financial times article illustrating iPhone 13 delays due to supply chain constraints.

🤔Interested in learning 0-1 HW Product Management?

Our readers have been requesting a practical guide to taking a hardware idea from concept to mass market.

We’ll be covering principles including HW product sense, business feasibility, go to market planning, user desirability, and technical viability.

Our goal is to help beginners or even experienced product makers sharpen their craft. Drop your email below for access to initial modules and early bird pricing.

Join the Waitlist

Supply Chain Definitions

Below are some common terms you may hear when working with manufacturing and supply chain partners. Note that they’re biased towards automotive but generally apply across all industries.

• Tier 1

  • Direct suppliers to an OEM/JDM/CM. They make complete systems or modules that can be plugged into an overall product.

    • For example - Seat suppliers for cars and camera suppliers for phones.

• Tier 2

  • Provide components to tier 1s.

    • For example - Frame tube supplier for tier 1 seat supplier and lens supplier for tier 1 camera suppliers.

• Tier 3

  • Suppliers that provide components or raw materials to tier 2s.

    • For example - Cold rolled steel for tier 2 frames and plastic manufacturer for lens suppliers.

• ODMs (Original Design Manufacturer)

  • Designs and manufactures items which are sold under another company’s branding.

    • Ex: Honeywell making Amazon’s smart thermostat.

• JDMs (Joint Design Manufacturer)

  • Hybrid approach where a company co-develops products with manufacturers.

    • Ex: TSMC for Nvidia.

• OEM (Original Equipment Manufacturer)

  • Companies that may design or manufacture certain parts of their own.

    • Ex: Honda making its own engines and transmissions.

• CM (Contract Manufacturer)

  • Provides services to completely manufacture a product. Usually the design has been completed by companies prior but CMs sometimes offer their design services as well.

    • Ex: Foxconn for Apple.

We’ll be focusing on contract manufacturers for this article. Don’t get caught up in definitions for now given that over the years I’ve found a lot of the terms above to be interchangeable.

The key is to have ownership over your product design, leverage supplier expertise for production, and ensure the manufacturing system is robust.

Low Cost Country Sourcing

Building products involves much more than just strategy, design, and engineering; it requires balancing

1. Technical feasibility

2. Business viability

3. User desirability

The last 2 can only be achieved by economical supply chain decisions. This is why hardware products are often sourced from low-cost regions.

It’s important to recognize that the equation isn’t as straightforward as “build for $50 and sell for $100”. Gross margins are comprised of various factors including assembly labor, packaging, BOMs, material attrition, shipping, and tarrifs. On top of this, fixed costs like non-recurring engineering (NRE), tooling, fixtures, certifications, and testing will significantly erode these margins. So much so that most hardware companies only achieve gross profit margins in Gen 2 of a new product and true net profit in gen 3.

While local production is always preferred, the factors above necessitate partnering with manufacturers abroad to achieve price points which users can buy. A great design is only valuable if users, who are price sensitive by nature, can buy it.

Supplier/Manufacturing Regions

When assessing the global landscape, we see the following regions with low cost, high value manufacturing partners: China, Vietnam, Thailand, India, Mexico, and Latin America.

Generally one should select these regions is if their product

• Is higher volume ( typically > 5000 units)

• Requires manual assembly and labor

• Needs quick availability of machine bring up and repair personnel

• Benefits from rapid development of manufacturing lines and tooling (molds, fixtures, and assembly equipment)

If your product is low volume, heavily automation dependent, or IP sensitive then consider local manufacturing partners.

For example, one of the reasons why automotive plants are local is due to the CapEX on robotic paint/weld lines and large import tariffs. Also consider aerospace plants being local as well due to lower volume, sensitive defense technologies.

Supplier Qualification Process

Now let’s talk about how to actually select a manufacturing partner. Below is a high level process flow.

As a general note, most of my content can be applied to the corporate, startup, or even entrepreneurial world. However for this post I’m going to give a disclaimer to any entrepreneur who’s ready to manufacture their first product.

Ensure you have several prototypes and have validated customer demand prior to engaging with manufacturers. Take the extra time to engage with users, get proof of concepts in people’s hands, observe their feedback, validate your assumptions, test corner cases, and review designs with experienced engineers.

The last thing you want to do is spend thousands in tooling and hours of your valuable time qualifying suppliers if your product will not sell.

Supplier Search & Assessment

Let's assume you’re in the PRD phase of the product development process. You have a design that has been prototyped and validated for customer demand.

When finding contract manufacturers, look for the following items to enable long term, sustainable relationships. A good tip is to talk to people or organizations who’ve used prospective suppliers before. Dig into the CM’s experiences and make sure they have the business and technical expertise in your product’s domain.

Product

• Intellectual property protection

• Capability and experience with similar products

• Typical yields & build volumes

• Product development process and timelines

• Customer support & quality management systems

• Typical tooling schedules and construction timelines

Logistics

• Local and import taxes

• Conversion rates

• Accessible location

• Preferred transport methods (truck, ship, air)

• Lead times

• Freight expenses

• Raw material sourcing & availability

Regional

• Local culture and norms

• Government ties

• Political infrastructure

• Reliable access to workforce

Corporate Ethics

• Sustainability practices

• Social responsibility

• Worker treatment

• Regulatory compliance

Supplier Team

• Talent and knowledge about subject matter

• Management and ICs are aligned with vision

• Company culture is friendly, honest

RFQs

The next step is to create RFQs. When doing this it’s important to balance sharing detail while not exposing critical IP. It’s okay to make a case for why your business is important, justify your positioning, and elaborate on product vision. After quotes are received, consolidate them and ensure the following items are accounted for.

• Unit Costs - Used for COGs and gross margin calculations

  • BOM cost

    • Material cost such as part housing, PCBs, batteries, cameras, etc

  • Packaging

  • Shipping

  • Labor

    • Direct (higher rate): assembly, test, quality

    • Indirect (lower rate): packaging, repair

  • Tariffs

  • Material attrition

    • Repair costs

• Fixed Costs - Go into LTV (life time value) calculations

  • NRE

    • Non recurring engineering - one time cost of new product development such as R&D, ME/EE/FW engineering, and manufacturing line design

  • Tooling

    • Molds or equipment used to produce parts - think injection molding for plastics and die casting for metals

  • Equipment

    • Fixtures, jigs, and manual or automated assembly machines

  • Certifications

    • Lab testing for regulation and safety compliance

• Volumes

  • If low cost country sourcing then aim for at least 5000 units. Remember that most CMs only make tangible profits once volumes are in the tens of thousands

• Supply Chain

  • Raw material availability

  • Product forecast and schedule

  • Tooling schedules

  • Equipment lead times and risk buys

• Other

  • Legal terms

  • Quality management system

  • Certification process

  • Reliability testing process

  • Design for manufacturing/assembly process

  • FMEA/error proofing process

  • Cosmetic and Functional checks

  • General scrap rates

It’s critical to have multiple RFQs. Relying on one CM will almost always result in a disadvantageous situation for yourself. Don’t try to rush things by downplaying this step. Instead take your time to compare, negotiate, and finally select a suitable partner.

Factory Visits

One of the differentiators in hardware product development is the critical need to have hands on experience with what you’re building.

When I used to work in Japanese manufacturing we called this “Genba”, which means actual place. It’s not enough to rely on a picture or email, we have to be on the shop floor, especially considering how significant of an investment contract manufacturing is.

Apple took this so seriously that it was common for us to spend months in China. Everyone from new hires to directors and VPs were frequently traveling for engineering builds. This culture of obsessing over details in every aspect of product development may be one of the reasons why Apple’s products are so robust.

Once you’ve made a short list of suppliers, your teams should schedule factory visits to verify any assumptions. Here are some things to consider when auditing CMs.

Respect

1. This may seem obvious but over the years I’ve seen my fair share of execs scream at manufactures. And to nobodies surprise, that created friction when it came to solving real problems.

2. Yes suppliers will mess up. Yes they owe you high quality parts. But remember that it’s a long term partnership.

3. Suppliers are not at our mercy; they have other customers and production lines which have to meet certain build schedules.

4. Consider that many workers have cost of living/income ratios that are far different than yours. Suppliers need to charge a certain amount to maintain healthy business practices and wages.

5. They are the expert, not you.

Diligence

1. As an auditor you need to be objective, professional, articulate, and curious.

2. Ask several, concise questions and use diagrams. Don’t assume the obvious given foreign language constraints. Never be afraid to say “show me how this works”.

3. A good ratio is to be asking questions 20% of the time and observing/listening for the remaining 80%.

4. Have a clear, structured agenda.

Technical Checklist

A lot of the design and manufacturing items below will only be feasible to audit after supplier selection but it’s good to have these questions in mind at all times, even when initially touring factories.

Selection & Development

Once a contract manufacturer is selected, it’s time to initiate a formal reporting process. Now’s the beginning of hopefully a mutually beneficial journey. It’ll require multiple check ins, meetings, visits, and validation work throughout your product development process. Below are some things to keep in mind.

• Share BOMs, CAD, process flows, architectures, schematics, & FMEAs

• Set clear responsibilities for all teams on both sides

  • Legal, product, engineering, design, quality, and supply chain.

  • Get all teams involved early and often. As mentioned above, the incremental cost to product development of changes later in the process is significant.

• Have a strict and meticulous issues list

  • Use this to track all product development issues, responsibilities, and timing for closure. Review it weekly at minimum with your CM.

• Develop a supplier scorecard

  • Rate your CM on quality, delivery, and safety targets while giving them consistent feedback on performance. This will be handy when it comes to re-assessing contracts.

• Create templates

  • After years of working with Asian suppliers and manufacturers one trick to save you hours and free up your evenings is to make simple templates. You should drive reporting, not the CM. Dont be afraid to ask for details.

    • Make diagrams of what you want them to show you (parts, setups, fixtures, testing, etc)

    • Create clear, objective tables for DOE requests (design of experiments)

    • Develop a format for yield, quality, schedule, and test reports

    • Develop a format for FA reports (failure analysis, root cause studies, etc)

• Have boots on the ground

  • It’s critical to be line side, especially during engineering builds. No amount of phone or video calls will do justice. If travel is difficult then consider having an in region team - a local representative who can audit the factory on your behalf.
    

As we finish this article, it’s clear that supplier qualification and development is a very nuanced process. It may seem overwhelming but working with contract manufacturers to go from prototype phase to mass production launch is extremely rewarding.

In the next few weeks to months I’ll be writing more about manufacturing specifics like designing a production line, ramping, and FMEAs. For now I hope this was a good intro.

Thanks for Reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Designing for Delight vs Pain 🔥

• Hardware Product Management 🚀

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, like and spread the word. If you have any questions on hardware PMing, product development, or careers let’s talk.

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Last week I was researching a new feature at work for an upcoming device and needed motion detection. Typically we use PIR sensors but we were a bit cost and space constrained. Also given that this device already had a speaker and mic array I decided to look more into ultrasound sensing.

This led me down a rabbit hole of learning about how bats use sound waves to navigate, which reminded of why I got into engineering and eventually PMing. I’m sure all of us can remember when a piece of science or nature amazed us.

Hence today’s article will be a bit different from our usual programming. The upcoming articles will explore hardware PRDs, pricing, and strategy. However for today let’s appreciate some fascinating technologies we take for granted.

Nature and Tech

Biomiciry is the practice of taking inspiration from nature to solve problems.

Although we usually start with first principles during the ideation phase of a project, we shouldn’t be afraid of exploring analogous concepts in the world around us. Many of the best designers I’ve been around were great at observing their environment, and using that a brainstorming technique.

I think it’s because it’s hard. It requires one to pause, reflect, and question “why” several times over. How do ants communicate so well? What allows certain birds to create lift versus others? Why do leaves provide cooling? And so on.

Lets walk through some examples of how this is already present in some of the tech we use everyday.

1. Ultrasound Motion Detection

What is it

These are high frequency sound waves that operate in ranges which are beyond human hearing.

What are some use cases

They can be used in smart home devices like speakers for motion and proximity detection to setup routines. For example your devices automatically detect when you’re home instead of using a wake word (“Hey Siri, Alexa”). This detection triggers your lights to turn on and alarm systems to disengage.

Another example is in cars for parking assistance, blind spot detection, and collision avoidance.

How it works

Devices, like a smart speaker, can emit sound waves which then reflect off of near by objects and are picked up by microphones. Then there’s some sophisticated signal processing to detect if there’s motion.

In cars it’s done by using a transducer, a device that does both emitting and receiving of sound waves through piezoelectric crystals which convert waves into electrical signals.

How its inspired by nature

A natural process called echolocation is where animals use sound for detection and navigation.

• Bats, and certain birds, emit high frequency sound waves and use echoes to determine the texture, shape, and placement of nearby objects for hunting and navigation in the dark.

• Similarly dolphins use echolocation by producing whistles and clicks. Once these bounce off objects it helps them create a conceptual map of their geography.

2. Microstructure Adhesives

What is it

Sometimes called dry adhesives - these are products that can adhere to surfaces without being wet or “sticky”. They work by utilizing physical mechanisms like Van der Waals forces instead of traditional chemical bonding.

What are some use cases

• Robotic grippers

• Bandages that can stick to skin without causing damage

• No residue tapes from Nitto Denko and 3M

How its inspired by nature

Geckos have feet that cling to walls, but they’re not really sticky. They have tiny hairs which, when a force is applied, bend and make them adhere to surfaces. This is achieved by intermolecular forces and is being used by NASA for space grippers:

“Behind this phenomenon is a concept called Van der Waals forces. A slight electrical field is created because electrons orbiting the nuclei of atoms are not evenly spaced, so there are positive and negative sides to a neutral molecule.  The positively charged part of a molecule attracts the negatively charged part of its neighbor, resulting in “stickiness.” Even in extreme temperature, pressure and radiation conditions, these forces persist.”

3. Efficient Structural Design

What is it

What I mean by efficiency here is structures with high strength to weight ratios, optimization of space, clever material usage, and relative ease of assembly.

What are some use cases

• Packaging

  • Think of cardboard boxes. They utilize a honeycomb pattern to create strong, lightweight, and eco-friendly packaging. This design is also good at absorbing shock and protecting contents.

• Automotive components

  • Some traditionally plastic interior trim components such as door panels, headliners, or seat supports can also be made into a light weight honeycomb structure while maintaining stiffness. This is done through a combination of laminations, thermoforming, and injection molding.

• A bunch of other stuff

  • Architectural elements, crash resistant airplane components, and textiles. Honey comb structures are a benchmark in the field of biomimicry.

How its inspired by nature

Bees are incredible. There are a lot of studies on this but generally if they were to disappear we’d struggle to survive because the crop species they pollinate make up the majority of our food supply.

When they construct their hives, bees do so by crafting layers of hexagonal cells. This interlocking design has high load bearing capacities, great strength to weight ratios, is very efficient from a space and material POV, and also provides thermal insulation. All of these properties in a single, natural design is incredible.

If we look at a specific example, in the image below the human made honeycombs on the left have sharp corners, whereas the bee made ones on the right naturally have softer ones. This subtle corner radius is actually better at mitigating node specific fractures, all while increasing stiffness.

4. Eco-Friendly LEDs

What is it

LEDs are all around us and while this next example of biomicry looks like it’s still in the research phase to me, it’s still fascinating.

What are some use cases

• Smart lights

• Backlit car interior switches and dials

• Thermostat displays

How its inspired by nature

Fireflies emit light through a chemical reaction in their organs which then transmits through a textured structure on their exoskeleton.

This structure is asymmetrical, one side is slanted more than the other, allowing more light to pass through than if it was symmetrical (the former has greater surface area and more opportunities for light to escape through randomization).

Researchers, inspired by this structure, created a jagged layer on top of LEDs (keep in mind that regular LEDs do not have any layer on top). After implementing the jagged structure, they observed light extraction gains by more than 50%. Pretty cool given that LEDs in the market still have some work to do to get greener.

Next time you’re using a device or working on a new project take some time to ask how much of it was inspired by nature. You’d be surprised as to what you’ll find.

Thanks for Reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Designing for Delight vs Pain 🔥

• Hardware Product Management 🚀

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, please like and spread the word. If you have any questions on hardware PMing, product development, or careers let’s talk.

Subscribe now

Share

In this week’s session we’ll be talking about how to get more out of product development.

Typically when PMs set new product vision they do so to address a list of pain points. This leads to good, but not great products.

This is because they end up satisfying a check list rather than actually creating a compelling case to excite users.

How do companies actually surprise and delight their customers?

Examples of User Delight

These are subtle features which provide exceptional convenience. Tiny details matter given that it’s these details which compound to create an overall experience.

For example, most laptops can crash to the ground if they’re charging on a table and someone walks through the cord. Apple solved this problem with the MagSafe charging cord which automatically detaches if someone accidentally pulls on it. No more broken laptops.

Ecobee’s smart thermostat detects user presence to automatically turn on if someone walks near it. This may seem trivial to some, but it’s convenient and saves the user from having to cycle through menus.

Creating Great Experiences

In The Power of Moments, Dan and Chip Heath talk about how we can intentionally create extraordinary user experiences.

When we think about memories, there are two concepts to consider.

1. Peak

   The high point of a user's emotional experience with a product or service.

2. Pit

   The low point of a user's emotional experience. It's the moment of greatest frustration, confusion, or dissatisfaction.

Peak Moments

Think about going to the beach. Typically we wouldn’t remember minute by minute events like parking or waiting in line for food. But we do remember the sunset and waves. In other words we remember the peak.

Similarly, in order to delight users and build world class products we need to create peaks for users. These can come from smooth user interfaces, crisp packaging, highly relevant attributes, instant customer support, or personalized features.

The problem however is that PMs, designers, and engineers do the opposite. We usually focus on pits, not peaks.

Naturally we spend time on fixing whats wrong. This is why product managers will spend a lot of resources on chasing one or two start customer reviews.

But, satisfied users are actually the ones who generate more revenue. Happy users are the ones who talk about products with their friends and family over a BBQ.

Dan and Chip Heath mention that spending time on tailoring experiences for customers who are in the 3/4/5 star range can increase gains by 9x versus solely combatting negative reviews. Of course this doesn’t mean we ignore low star reviews.

The Power of Surprise

The other element of delivering exceptionally satisfying user experiences is surprise. When I was at Apple we might’ve taken this to another extreme.

Things were so secretive that sometimes I wasn’t aware of what certain team mates were working on. This ultra secrecy was done to enable surprises. The premise was that the more confidential a workplace, the less likelihood of new product leaks, and in turn the more customers can be surprised on announce day.

To surprise is to stay away from what’s typical. It’s about elevating the ordinary and breaking the script like automatic IPD adjustments on Apple Vision Pro. IPD, interpupillary distance, is the distance between your eyes. It’s used when we get glasses. It’s also needed when users wear mixed reality headsets.

Basically the position of each display needs to match the position of your eyes. Not doing so will cause distortions and headaches. Given that different people have varying IPDs, competitor AR/VR headsets require the user to manually adjust displays with their fingers.

The Vision Pro goes above and beyond. Once a user wears the device, their displays automatically adjust to the user’s IPD with an elegantly engineered (and very sophisticated) motor assembly. This is a solid example of surprise because they didn’t really advertise the feature. It just works, like magic.

Latent Needs

But how does all of this tie into customer needs? Do we just create solutions for the sake of them? Do we just fit technologies in spaces and hope they work?

After all, good product development practice requires a sense of empathy with user needs. Typically we focus on primary and secondary needs. However, to really delight customers we need to address latent needs.

Let’s look at some definitions and examples.

Primary Needs

• The obvious, straight forward, and fundamental needs that a product must satisfy for it to be considered functional.

  • Example: A smart thermostat accurately maintains temperature.

Secondary Needs

• These are additional needs that enhance user experience but are not essential for the product’s core functionality.

  • Example: A smart thermostat can be adjusted in comfortable positions.

Latent Needs

• These arise from problems that are hidden, ones that customers dont immediately realize they have.

  • Example: The thermostat is aware of users being at home like the ecobee thermostat automatically detecting occupancy and turning on.

  • Another Example: like the MagSafe charging cord. The primary need was to deliver reliable power. However a latent need was that users’ cables were getting caught by people and pets, slamming their laptops to the floor.

These are needs that users find difficult to articulate. They usually reveal deeper levels of interaction with the product that users would greatly appreciate, but didn’t think of in the first place.

Typically customers will spend time on apparent pain points like a way to control their mixed reality headset. But when companies go above and beyond to discover a hidden problem, then breakthroughs happen. For example we could navigate these headsets with a mouse, keyboard, or hand held controllers like Meta.

But these users have hidden needs for portability and flexibility. Apple addressed these latent needs by having users rely on their eyes and fingers for input. It’s pretty innovative given that you literally use your eyeballs to select menus. It’s much simpler for users, reduces friction, and there’s no baggage from carrying extra accessories.

Years ago when I was a new to product development a co-worker shared this misinterpreted Steve Jobs quote. We concluded that its not really customers but more so the company that decides what features actually matter.

"Some people say give the customers what they want, but that's not my approach. Our job is to figure out what they're going to want before they do.”

- Steve Jobs

Now I realize I was wrong. This quote has layers of meaning. Now I think what was trying to be said was that customers don't always know how to communicate certain needs and it’s the product team’s job to anticipate them. This intimate knowledge is what leads to innovation and meaningful user experiences.

How Do We Discover Latent Needs?

Product managers, designers, engineers should take the time to really study users. We need to observe customers and ask several rounds of why to get to root causes. This can be done by looking for facial expressions, emotions, verbal cues, non verbal cues, responses, and frustrations.

It’s easy to solve obvious problems, but world class products come from the attention to detail needed to study subtle ones.

Once you think you’ve come across a latent need make sure to perform validation studies by getting mock ups in front of users. In the hardware world we say that while a picture speaks a thousand words a prototype speaks a million.

Some More Examples…

Some rightful criticism to the examples above may be that they’re all premium priced products, so of course they delight users. Here are some everyday examples of features which I think are subtle, clever, and never fail to make my life easier.

Ikea cups have a tiny notch to prevent water from collecting in dish washers. Laundry detergents have a nozzle, in addition to the regular cap to make it easier dispense liquid. And lastly, some cars have slots in the instrument panel to place key fobs, preventing them from bouncing around in your cup holder or trays.

Thanks for Reading

Make sure you check out some other articles:

• Hardware Product Development Process ⚙️

• Hardware Product Management 🚀

• Hardware vs Software 💻

• Teardown of how iPhones work 📱

• 5 Books on HW Product Development 📚

If you enjoyed this, please like and spread the word. If you have any questions on hardware PMing, product development, or careers let’s talk.

Subscribe now

Share

This is the continuation of a series in which we outline common technologies used in building physical products.

I’ll be covering electromechanical disciplines such as displays, plastics, batteries, PCBs, audio, RF, and more. For example, check this out for everything about the basics of cameras.

As a reminder - this series isn’t meant to be a deep dive, rather it’s supposed to serve as a high level overview for product managers, engineers, designers, and non technical enthusiasts. Think of it like a refresher on the basics.

This week we’ll focus on soft goods, an area which is usually overlooked. This post will focus on two sections:

• Use cases

• How they’re made

1. Use Cases

As stated in previous articles we’ll first talk about highlighting customer experience as product development shouldn’t be done in a vacuum. We create things to solve user problems.

Softgoods are underrated given that they’re all around us and enable an integral part of customer experience for physical products. These textiles, fabrics, leathers, and silicone components serve functions to protect and cosmetically enhance products like phones, furniture, automotive airbags, and car instrument panels.

They also require more creativity from a product development perspective given that they’re difficult to constrain. Unlike rigid products they don’t retain their shape easily and have very loose tolerances. This makes them challenging to mass manufacture in a repeatable manner.

There’s also additional variation from natural elements like scars on animal hides when processing leather products.

There’s probably no company that does softgoods as iconically as Apple. I remember being surprised with the scale of their softgoods org when working there. They do a great job of combining functional and aesthetic product requirements.

For example, check out how seamlessly the Vision Pro’s light seal and knit band contour with its chassis, all while providing light protection and comfort to the user’s head. Also look at how many companies copy watch band designs like the breathable sport loop or leather magnetic link.

Another example of balancing cosmetics with functionality is Apple’s HomePod woven mesh. It was developed to be acoustically transparent, allowing sound waves to travel through while shielding key internal components from debris.

Switching industries, we can see how prevalent the use of softgoods is in automotive. When I used to work on interior systems at Tesla, we would use varying types of textiles - from woven fabrics, to PU leather, to silicone liners. These would be applied on instrument panels, door trims, seats, and (most underrated of all) airbags.

A side note on why airbag fabrics are so cool is because they have to support rapid deceleration and a chemical explosion when deployed at varying altitudes, temperatures, and humidities - all while balancing occupant restraint and preventing injury from the force of deployment. These product requirements make one realize the level of sophistication needed to develop textile trims.

Cosmetics are also a significant consideration in automotive given that things which may seem trivial to the average person are put under a microscope by leadership such as stitching, seam placement, wrinkles, and scuffing resistance.

Our chief engineer had to sign off on the positioning of seat leather seams at a Japanese OEM I was working at and VPs were always giving feedback on textile wrinkling at Apple.

2. How They’re Made

2.1 Leather

Without trying to be controversial it’s important to point out that leather making is actually one of the oldest recycling processes in the world. Indigenous peoples have been using animal hides for thousands of years to make clothing, armor, and furniture as an effort to not be wasteful after hunting.

One interesting anecdote I picked up when in I was in a leather factory in Mexico that made trims for Mercedes and Toyota was that cows are not killed primarily for leather, rather they’re first farmed for meat production. Their hides are given to leather factories as a byproduct after.

It’s important to be mindful and holistic when talking about global supply chains as animals are also a part of product development value streams. The things we interact with everyday aren’t made in a vacuum.

Moving on, let’s talk about the leather making process flow below.

1. Hide Processing

   1. We start by receiving and cleaning animals hides which come from farms. Their appearance, texture, and attributes will vary based on where the animal came from. For example, Argentinian cattle have different characteristics in their skin versus those from the US based on weather and terrain.

2. Tanning

   1. The hide is then soaked in giant drum containing various chemicals to covert it to leather, and to prevent decomposition. This is done through altering its protein structure, removing hair, modifying grain, and reabsorbing humidity.

3. Drying

   1. Hides have salt removed and are either stretched or fixtured onto large equipment for air or vacuum drying. Most factories have a manual process for transporting hides between steps 1-3, something which shouldn’t be overlooked as they can weight between 70-90 lbs each.

4. Finishing

   1. Once hides are dried they will need to be processed for final cosmetics, malleability, texture, shaving, and blemishes. At this stage you may be able to see scars or bug bite marks on an animals skin - aspects which some consumer products keep to maintain authenticity.

5. Cutting/Sewing

   1. Finally, after hides are finished they’ll be cut into templates using cookie cutter like tools. These templates will be sewn or stitched together to make the final product such as an automotive seat trim, sofa cover, bag, or even an iPhone case.

      

A note on Vegan leather..

While it may be an alternative, it’s important to remember that vegan leather is usually only partially sustainable. This is because its often made from a mix of biomaterials, agricultural waste, and plastics like polyurethane.

2.2 Textiles

Moving onto textiles and fabrics, these trims are made from four main sources with the first three being natural:

1. Plant such as cotton or flax

2. Animal such as wool or silk

3. Mineral such as glass or fibre

4. Synthetic such as nylon or polyester

In general the process flow starts with taking fibers, converting them into yarn, transforming that to fabric via weaving/knitting, pretreating, dyeing, printing, and then finishing. Lastly, similar to leather, we cut/sew individual panels to create a final trim. This process is shown below.

Once fibers are converted to yarn, the most common methods of fabric production are weaving and knitting.

Weaving involves interlinking horizontal threads (weft) with vertical threads (warp). It’s typically used for products that require structure, strength, and durability like tailored clothes, tents, conveyer belts, and most automotive car seats.

Woven fabrics are made using a Loom which is a machine that holds warp threads under tension to enable weft threads to be interwoven.

Knitting on the other hand is a fabric production process that involves threads consecutively placed together in loops or stitches. It’s preferred when your end product requires more comfort, breathability, flexibility, and ease of motion like activewear, stretchy furniture covers, and some Apple Watch bands. It’s generally quicker and more cost effective than weaving.

Other common softgoods include polyurethane (PU), silicone, and foam but because they require one form or another of injection molding we’ll be covering those in our plastics technology series.

That’s all for now.

Thanks for reading.

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This week we discuss product development differences in the digital vs physical world. Whether it’s folks who want to pivot careers or even people who are interested in side hustles, let’s discuss some of the challenges when it comes to building hardware.

Case Study

I can just make a list of bullet points outlining differences between the two domains but I always learned better through examples, hence let’s do a case study.

We’ll be developing two products in parallel, one physical and one digital, with similar target use cases and customer personas to try and limit variation during the comparison.

For HW it will be a smart watch and for SW it will be a new fitness tracker app.

The smart watch is relatively simple as it omits technologies such as cameras and motion detection (PIR/radar) but still has key components like RF, a display, heart rate sensing, a gyroscope, an accelerometer, mechanical housings, and soft goods.

The vision for the smart watch is to enable sleek design, stable battery life, and reliable fitness tracking in an affordable price range. The problem it’s solving is that fitness watches are reliable but look boring.

Our fitness tracker app will target unmotivated users with mental health challenges who want to change their lifestyles but need personalized coaching and a mindfulness platform to fit their routines.

The target user persona for both products are aged 22-35 health conscious and tech savy people whose median income is $60,000-$90,000. Their values are frugality, mindfulness, fitness, and social activism.

Differences

1. Schedule

   • Software (Fitness Tracker App): The app can be developed using agile (bi-weekly sprints) which allows frequent updates and new features. For example if a bug is found with the goal setting notifications, a patch can be released within a few days.

   • Hardware (Smart Watch): To mass manufacture a watch without variation or safety issues its scope will need to be locked sometimes years before launch. For example, if the main logic board doesn’t fit in the chassis properly it can take months to remanufacture the tooling. Hence agile can only be used in early proof of concept stages while waterfall is a must once EVT or actual development starts.

2. Cost

   • Software (Fitness Tracker App): The app will focus more on CAC (customer acquisition costs) like digital marketing, user support, and server maintenance.

   • Hardware (Smart Watch): Costs for the watch will be comprised of COGs such as BOM parts like the metal housing, displays, battery, and chipsets. Sourcing and maintaining unit pricing will require significant work from the supply chain team. Let’s also not forget assembly head count, shipping, and packaging.

3. Profitability

   • Software (Fitness Tracker App): The app will have significantly higher margins (~70-90%) due to low incremental cost per user after development. For example, once the app is launched adding new users will primarily require bandwidth and minimal support.

   • Hardware (Smart Watch): This will have a lower gross margin, as is the case in the hardware world due to manufacturing. For reference, margins in automotive are ~5% and ~30-50% in consumer electronics. If the watch’s MSRP is $200, you can expect the landed COGs to be about $130-$160.

4. Scalability & Manufacturing

   • Software (Fitness Tracker App): The app will be relatively easy to scale considering that adding new users is a function of server capacity which is usually straight forward and cost effective.

   • Hardware (Smart Watch): It’ll be orders of magnitude more difficult to scale since we will need significant Capex, equipment, and factory input. For example going from 1K to 100K units will require designing and validating fixturing, tooling, FAT testing, materials, metrology, QC, SOPs, manufacturing, and operators to ensure the process is repeatable.

5. Engineering, Testing, & Iterations

   • Software (Fitness Tracker App): Teams usually focus on system architecture, coding, UI, security, debugging, and data analysis with iterations being rapid and fluid with deployment. For example a new exercise tracking feature can be rolled out immediately after dev/QA.

   • Hardware (Smart Watch): This will involve several interdisciplinary teams such as mechanical, REL, electrical, and firmware engineering. The biggest drawback will be the inability to rapidly prototype and gain design feedback. For example if we want to test assembly level waterproofing flaws we’ll have to wait weeks/months to ensure the PCB, sensors, mechanical housings, sealing, and displays are at the latest design maturation, fabricated, and tested at a component level first.

6. Supply Chain

   • Software (Fitness Tracker App): There will be no physical supply chain. Instead we’ll rely on cloud services for managing server load and digital distribution platforms (App Store, Google Play) to get to our customers.

   • Hardware (Smart Watch): This will be sophisticated given that we have to navigate around supplier souring, selection, contract manufacturers, inventory, logistics, tariffs, and build volumes. The travel and on the ground validation work to other countries is also a huge effort. For example, the watch’s leather band could be sourced from Mexico, chipset from Taiwan, display from South Korea, housings from China, and final assembly in India.

7. Design

   • Software (Fitness Tracker App): The app’s UI and UX will be developed fairly rapidly using wireframes and digital mockups. To validate intuitivity and friendliness it will take relatively quick A/B testing.

   • Hardware (Smart Watch): Aesthetics and form factory will be led by the industrial design team which will focus on the watch’s shape, colors, ergonomics, materials, and textures. Making a comfortable wristband for example will be expensive and time consuming given that iterations require machine shop work, CAD, 3D printing, and clay models.

8. Regulations

   • Software (Fitness Tracker App): We’ll need to comply with certain regulations like GDPR and HIPAA to ensure health data is encrypted and secured privately.

   • Hardware (Smart Watch):
     We have to comply with safety and regulatory standards such as FCC for electronic emissions and CE for safety compliance. Ensuring the smart watch does not emit harmful radiation and complies with electrical safety standards can take months.

9. User Feedback & Support

   • Software (Fitness Tracker App): There’ll be immediate user feedback through app reviews and analytics given the ability to release rapid updates. For example if the habit tracking feature isn’t working a fix can be caught and deployed within days.

   • Hardware (Smart Watch): It’ll take longer to gain customer insights because we can’t just press a button to release new features. We’ll need to issue MOQs, manufacture, and ship physical prototypes of the watch to our alpha and beta testers for them to have tangible experience with the watch. If there’s a UX issue with the heart rate monitor, accelerometer, or even display it’ll take weeks to root cause.

10. Sustainability

    • Software (Fitness Tracker App): Efforts here will be more implicit in nature such as writing efficient code to lower energy consumption of the app and create more eco friendly hosting.

    • Hardware (Smart Watch):
      As the pressure to build more ethical products grows we’ll have to make several design and manufacturing decisions to ensure environmental compliance. For example will we use aluminum instead of steel for the chassis to ensure recyclability? For the inner frame can we implement reused plastic? In theory sure, but in reality this reused material will compromise mechanical properties and will be more expensive leading to lower margins. Lastly we have to also consider carbon emissions in the overall production and shipping value stream.

Of course it goes without saying that both domains have their own nuances and complexities which can’t be fully covered here. Both are inherently valuable and challenging given their unique applications.

But if hardware is this hard, why even bother? For me it’s because hardware products change the world. There’s a special, visceral feeling in building something tangible that interacts with your everyday space. Also, I was never good at coding anyways 🤷‍♂️.

Thanks for reading 🚀

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This week’s newsletter will be a bit of a rant. I’ll be attempting to articulate why the hardware community needs an effective PM culture to prevent poor products from being released to market.

1. What’s a HW PM?

There are many definitions of product management but my favorite, especially considering this is a hardware sub, is from the inventor of the iPod, iPhone and Nest.

Tony Fadell states in Build that:

The main goal of a PM is to advocate for a delightful user experience. They Represent the customer.

In the physical product space “PMs” are sometimes confused with program managers and project managers. Those roles are different from product management as shown below.

• Product managers (PdM) focus on the ideation, why, what, and who of a product

• Program/Project (PjM, PgM) managers focus on execution and the how after product requirements and scope have been set by the product manager

Product management is a pretty broad role with varying descriptions based on company, especially in hardware.

However most PMs generally find themselves doing some of the following:

For more context on the hardware product development process check this out.

2. Case Study of a PMing Failure: Humane Ai Pin

So, why does any of this matter? It’s because ideally the PM role should help prevent bad products from being shipped but what I outlined above was just theory. For a practical example look no further the recent Humane AI pin.

You’ve probably seen several negative reviews about it already.

2.1 What is the Pin Anyways?

It’s a hardware device which, when mounted onto your shirt, acts as an AI assistant through voice and a projection mechanism. Common use cases involve making phone calls, taking photos, and helping with nutrition related questions.

The pin was developed by ex apple VPs of Industrial design and software.

The premise of the product is based on the fact that smart phone screens are harmful and hence the device aims to replace them.

2.2 Why it’s a Failure in PMing

As mentioned above, the main role of a PM is to advocate for desirable user experience.

They’re supposed to see through the noise and block inadequate features or ideas, even if the engineering team pushes them. Even if the technology seems cool.

As a former engineer this is why I made the transition to PM. I found alot of the new technologies that I was working on seemed neat in theory, but were missing the overall context of providing genuine value to users.

This isn’t to say that engineering innovations should be taken for granted but what I am saying is that a good PM culture needs to prioritize user experience over sophisticated engineering and design.

To illustrate this point, below is a list of cool engineering applications which provide poor user experience in the Humane AI Pin.

All of which should have been significantly negotiated or pushed back by the product team as not being ready to ship in this product’s architecture.

• Laser projector

  • A 720p display on your hand and an entirely new form of display technology for consumer devices seems sweet in theory

  • But several reviews have pointed out that this projector has resolution issues, isn’t visible outside, and rolling a user’s palm as a form of input is difficult to learn

• Using AI to answer questions

  • Having a digital assistant to read texts, make calls, give nutrition information, and plan my day seems great in theory but I’m not sold on AIs robustness in daily life just yet

  • This is proven by the fact that the AI pin is slow and frequently gets basic information wrong on history, nutrition, sporting, and events

• Wireless charging clip

  • Having a series of electromagnetic inductive coils charging your device on the go without the use of cables seems like a spectacular win from engineering but one of the largest user complaints for this product is the resulting excessive heat generation, making it uncomfortable to wear

• Outward facing sensor array

  • Wide angled optical sensors packaged into a small form factory is a feat of optics, design, engineering, and manufacturing excellence

  • But the issue is that the resolution is poor and most people have privacy concerns with camera pointing at them at all times

2.3 How Could PMs Have Fixed this?

As mentioned earlier the role of a PM above all is to ensure that:

• Products solve a genuine problem

• They provide a desirable user experience

To enable these two goals there are mechanisms in place in the product development process to de-risk undesirable ideas from entering the market which include phase gates for customer feedback. Lets discuss them below.

2.3.1 De-risking at Early Stages

See here for a reference to the HW product development process.

The concept and definition phases are supposed to conclude with market research and user surveys to validate whether there is sufficient demand to proceed with investing resources in a dev commit. This should be done:

• With both quantifiable data and subjective anecdotes

• By studying market feedback and talking to customers one on one to validate their problems and genuine needs

• With proof of concepts and early stage prototype samples. It’s vital to get physical mockups infont of your customers

2.3.2 De-risking at Development Stages

The development phase has several gates to further de-risk bad product ideas, most famous being alpha testing in which employees provide field trial feedback and then beta testing for which customers provide real use case insights.

• These are sophisticated trials with detailed test plans, user feedback loops, and outcomes which should be presented to senior leadership

• Both phases need to have actual hardware in users’ hands (low maturation is fine at alpha and closer to MP level is required at beta)

• This is where Humane’s team should have had alarm bells going off regarding overheating, low resolution photos, slow AI, and other reported issues

• Teams are supposed to observe customers, talk to them, see how they interact with the product, view cues (physical/non physical), gauge psychological reactions, understand engagement, and vet out if their assumptions are solid

• Teams may be well into DVT and even PVT at this stage so product decisions are extremely costly given tooling locks, however that should not stop one from doing what’s right for the customer if issues arise (see examples below)

As builders and creatives sometimes it’s hard to step back and be more intentional. However we need to remove our bias and actually listen to what users are saying. Perhaps there’s a more simpler solution but it was ignored because the team was advocating for cutting edge technology.

Of course all of this can only be realized under the assumption that the culture is conducive to genuine user feedback.

If the CEO or senior leadership is stubborn with an idea then your product is destined to fail, such as the humane AI pin.

After all what’s the point of a PM team if leaders will not listen?

2.4. Counter Arguments

There were a few detractors online from my point of view, which is okay but I feel it’s interesting to address them because they were encouraging poor product practices.

Argument 1: The Pin is just a V1 product so it’s okay if it has poor user experience

This lack of understanding in product design and development undermines the efforts to develop a true V1 product. Companies should not ship half finished ideas and poorly thought out concepts. The customer is not responsible to pay for your mistakes. V1 is not meant to be a free pass.

• V1, as Tony Fadell puts it, needs to be innovative, disruptive, and provide utility. It should encapsulate your grand vision through great design and performance.

  • Products at this stage are not meant to be profitable due to new technology cost and are for lead users (meaning they still have to provide good user experience)

  • See first gen iPhone, Vision Pro, and Apple Watch

• V2 is an evolution of V1 based on genuine market feedback while retaining core product elements

• V3 is the mass market solution which focuses on profitability

  • See lower price point offerings of iPhone SE and Watch SE

  • It also took 3 generations to make the iPod profitable

Argument 2: Alpha/Beta testing wouldn’t have caught these issues anyways

My only answer to this after spending some time in the industry through working at Japanese OEMs, Tesla, Apple, and more is that there is a reason why we would spend millions per build (EVT, DVT, PVT) on prototypes, JD power IQS events, customer field trials, user studies, and EFFA feedback.

I don’t have the fondest memories of presenting to senior leaders about the most seemingly trivial of defects highlighted from user feedback such as the examples below:

• Stitching being misaligned by a few millimeters on soft good seat panels

• Gap/offsets between display to chassis housings being out of spec by just microns on consumer electronic devices

• Barely audible and low dB motor noise events

• Particles almost the size of human red blood cells on optical systems

• Almost physically untraceable contamination on flexes

• SUV door panel water leaks requiring hours with flashlights to detect

However looking back, now I’m grateful because those experiences taught me that customer acceptance is above all if you want to build good hardware.

3. The Positives

After all that negativity, not all is necessarily lost with the AI pin. There’re a few points which we, especially as the hardware product community, have to give them credit for.

3.1 Industrial Design

As a fan of elegantly crafted products I’m glad that the pin is made out of premium materials, has robustly assembled mechanical architecture, and posses a sleek form factor.

3.2. Courage to Innovate in Hardware

It’s difficult to develop new hardware given physical constraints, supply chain complexities, lead times, tariffs, inability to quickly prototype, regulations, cost, tooling challenges, and so much more.

Credit needs to be given to Humane for at least attempting to try something new in this low profit margin, fiercely competitive, and oversaturated industry.

Maybe a good analogy is to remember how Google glass paved the way for Meta/Apple AR/VR devices.

3.3 Opportunities for People with Disabilities

While this iteration of the pin has poor performance for most people, perhaps its sensing, computer vision, and AI/audio technologies can be leveraged to aid people in the following ways:

• Help visually impaired improve their spatial awareness

• Provide independence to the elderly and enable fall prevention

• Make emergency calls on behalf of those with limited mobility

• Aid dyslexic users with audio to help navigate when losing concentration

3.4 Facing Societal Issues

Humane’s founders wanted to create this product to reduce dependencies on screens after years of creating such products at Apple given that our phones aren’t the best for mental health and increase isolation.

Although the AI pin isn’t the best solution for now, it has started an important shift in conversations regarding the genuine value of the technologies we utilize.

Overall it has been an important lesson in using our talents to build more thoughtful, useful products.

Thats all for now.

Thanks for reading

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This week we dive into four of my favourite books on developing physical products. I usually find myself turning to these for inspiration and reference material.

Also make sure to check out the Hardware FYI substack for solid content on creating hardware! 🚀

Overview

1. Build

2. Universal Principles of Design

3. Product Design and Development

4. Show Your York

5. Design of Everyday Things

1. Build 🔨

By Tony Fadell

You’ll seldom come across people with a resume more impressive than Tony Fadell when it comes to creating world class hardware.

He’s an engineer, designer, and entrepreneur who helped create the iPod, iPhone, and invented Nest labs which was then sold to Google for $3.2 billion. Oh, and he also has 300 + patents.

Build is a fascinating read to learn about his career and life lessons. It’s also interesting how he describes the pressure and eccentric nature of working for Steve Jobs. My favourite excerpts are his takes on product vision philosophies and story telling.

1.1 V1/2/3 Product Management Philosophy

When the Vision Pro came out I remember people being, and still are, flustered by how expensive it is.

However If you understand the V1/2/3 approach to building products then you’ll understand why. Tony Fadell explains how Apple, and then later Tesla started adopting this approach.

• V1 Products

  • This is your first generation product. It needs to be disruptive, innovative, and encapsulating of the grand vision of what you want your product line to be

  • At this stage companies don’t focus on profitability or mass market affordability due to new technology cost and validating product market fit

  • These are for lead users and enthusiasts

  • Look at how expensive the first gen iPhone and Apple Watch were relative to their competitors

• V2 Products

  • This is an evolution of V1 based on market feedback. You ratify which features work and which don’t while maintaining your core product signature

  • For example the click wheel of the iPod, Nest’s circular shape, and the iPhone’s metal/glass design are timeless elements

  • Customer price point can stabilize vs V1 and unit economics start trending towards a gross margin

• V3 Products

  • This is where the majority of the market purchases your solution and you don’t need to rely on early adopters to buy a $3500 Vision Pro

  • It takes time to get here as Fadell mentions how it took 3 generations for the iPod to reach profitability

  • For practical examples, think iPhone SE’s and watch SE’s price point and mass consumer volumes in contrast to the original iPhone and watch

  

1.2 Story Telling

I also enjoyed Fadell’s take on storytelling - an element of product development which is severely underrated.

I’ve always thought that exceptional products and companies have a resonating sense of why with their customers. The what and how come later.

Every product should have a story, narrative that explains why it needs to exist and how it will solve your customer’s problems. A good product story has three elements.

• It appeals to people’s rational and emotional sides

• It takes complicated concepts and makes them simple

• It reminds people of the problem that’s being solved - it focuses on the why

2. Universal Principles of Design (Pocket)🧑‍🎨

By William Lidwell

This has refreshing reminders and is a great pocket handbook for when I’ve been stuck with problem solving or have been in a rut.

It’s simple, has practical examples, and has illustrations which are easy to understand. IMO this need’s to be on every creative’s table to stimulate thinking and help with brainstorming.

Expect to see concise and inclusive notes on cross industry disciplines like ergonomics, human factors, form, function, architecture, UI/UX, and more.

Ultimately this handbook does a great job in showing how design is all around us.

3. Product Design and Development ⚙️

By Karl T. Ulrich & Steven D. Eppinger

This is actually a textbook and in my humble opinion is the most complete, holistic book on physical product development on the market.

It has fantastic reference material for all stages of creating a physical product from initial business concept all the way through technical execution to really help rigorously and meticulously create robust products which are business viable, technically feasible, and user desirable.

Expect to see nuanced lessons on the following topics:

• Business case justification

• User needs analysis and customer interview methodologies

• Mechanical/electrical engineering specifications

• Concept generation techniques

• Industrial design

• Prototyping & Test

• Manufacturing & Production

• Unit economics & Pricing

• Product life cycle management

• Patents & intellectual property

Written by MIT professors, the audience for this textbook are product managers, engineers, industrial designers, MBA students, and entrepreneurs.

In summary If you want a true zero to one book, although this is a heavy read, this is the book for you.

4. Show your work 📣

By Austin Kleon

Show your work is actually more for others than yourself.

What does that mean? Well the premise of the book is to showcase the entire process of your projects - concept, sketches, prototypes, to final article - so that others can benefit and learn. It focuses on creating a habit of documentation and sharing.

Think process not product… take people behind the scenes

The more that people do this, the more we create ecosystems of creativity. I think this is a theme which the hardware community actually thrives in.

Think of how many times you’ve had to reference YouTube videos, blogs, GitHub, CAD sharing websites, journals, and lab reports to draw inspiration on how to research, design, test, prototype, teardown, machine, 3D print, jerry rig, benchmark, and breadboard your own projects.

Alot of what we do is based on seeing, observing, and referencing.

Don’t be a hoarder. Show your journey.

5. The Design of Everyday Things 🫖

By Don Norman

How can we talk about product development books without the operating manual for designers?

Don Norman originally published this classic more than 30 years ago, but its principles remain true until today. He was one of the first to pioneer terms like user experience and psychology in design.

One of my favorite quotes:

Good design is actually a lot harder to notice than poor design, in part because good designs fit our needs so well that the design is invisible, serving us without drawing attention to itself. Bad design, on the other hand, screams outs its inadequacies, making itself very noticeable.

For me this book is fun, inspiring, and genius. It reminds me of why I got into engineering and product management in the first place - which was questioning why the things around us are the way they are.

Thanks for reading! Feel free to share this work if you enjoyed 🙋‍♂️

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This week we talk about ageism, or actually the reverse of it in the physical product world. The inspiration for this was a reddit post where a Jr. software developer was talking about job anxiety as they get older.

There seems to be an implicit bias in the software world for preferring younger folk when it comes to hiring. While I haven’t come across an official study, there are several anecdotal articles reiterating this problem. See here and here for context.

My experience after years in the hardware space has been the opposite and today I’ll attempt to articulate three reasons for why that is.

Wether it was at Apple, Tesla, Japanese manufacturing, or Canadian IoT I’ve found that careers in hardware get better over time across industries and cultures.

Professionals with long tenure are valued for their wisdom and decision making ability. This goes for everyone - PMs, engineers, supply chain folk, and more.

1. Physical Presence & Infrastructure

• There’s no getting around it. In order to build physical products you should be there in person. You can’t rely on an engineers assumption or a supplier’s recommendation that X feature can’t be achieved because of Y constraints

• Whether it’s being there to open an injection molding tool to troubleshoot plastic part warpage defects or walking the SMT line to design contamination free circuitry physical presence is needed to gauge technical feasibility

• This isn’t limited to just engineers, even as a PM your ability to make product decisions and gauge business viability is greatly impacted by your on the ground know how

• Hence to build high quality products, to go from idea to execution, there needs to be some level of hands on knowledge of working with suppliers, most of which require international travel - think factories in Mexico, China, Europe, and more

• The Japanese referred to this term as Gemba - which means being at the actual place to develop an empathy for the process

• Additionally each phase of the process whether its early concept, prototype, or mass production requires equipment, tooling, styling studios, labs, and factories

• All of the above naturally takes years of experience to develop an intuition for and can’t be easily learned via online courses or boot camps