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Quitting dayjob, going solo
nick_papageorge073
Member, csevp Posts: 825 PRO
in General
Have any of you professionals quit a well paying dayjob to go out on your own? Either as a consultant or to bring your own products to market? If so, would you do it again?
My dayjob will be ending soon and I’m thinking of going on my own and to design a CNC for hobbyists to bring to market, rather than get another dayjob.
My dayjob will be ending soon and I’m thinking of going on my own and to design a CNC for hobbyists to bring to market, rather than get another dayjob.
2
Comments
In my last major role at an engineering consultancy, we dealt with a lot of hardware startups. We helped them bring products from concept to NPI in China. We even had an incubator program for a while for some of the very early startups.
Developing hardware is much more challenging than say a SaaS startup. You typically don't see any income until a while after your first production run. This often means needing to raise millions of dollars. People often think after they have a prototype that kinda-sorta works that they're almost ready to go into mass production. This is a horribly incorrect delusion. Hardware is hard. Scaling up something is hard.
I would encourage you to start with something that is simple, and doesn't have high tooling costs, or high minimum order quantities for raw parts/materials. If you can leverage crowdfunding, that can be an OK way to start, but be careful not to underestimate the total costs.
The number one thing though, is to make sure you have product market fit before committing a lot of resources to an endeavor. There are many clever ways to test that without spending a lot of money ("wizard of oz", concierge, etc.). Look up stuff about lean product development.
If you haven't done so already, read the Mom Test book.
What I'm looking to do is offer a kit made of sheetmetal, that the consumer would assemble with screws or rivets, then fill with epoxy granite or concrete when they receive it to give it mass and strength. Bench-topped sized. Target consumer is a garage DIY type.
Tooling would be zero, and the sheetmetal has very small minimum orders. This way I don't need a big shop to make parts, shipping would be light weight and flat shipped with normal carriers (not freight), and I can outsource the part manufacturing.
I would start super small, make a run of 10 and see if they sell easily. (after several prototypes). If it looks like it has legs, take it further. If not, get another dayjob.
I think I can do all of this for only 5k USD or less range, including the prototypes and first qty of 10 order. So if it does not work, I won't be out much money.
I've been working on this idea for a few months on the side, but I'm so worn out from my dayjob hours that when I come home I'm out of energy for this side project. I think the only way I could do it for real was if I focused completely on it.
I do have enough money saved up for my living expenses that I wouldn't need a dayjob for a while.
What actually worries me the most about this idea is the numbers. I'm working on a rough BOM, and thinking about what I could sell the final product for. I'd have to sell quite a lot to equal an engineering dayjob salary.
We shall see:)
Hopefully all your high tolerances for CNC are coming from parts other than the sheetmetal itself (e.g. off the shelf lead screws and digital sensors).
Margins on mass produced items are generally not super high, especially if it goes through distribution to retail. Direct to consumer is easier these days, and it sounds like you have a good path to remove some of the shipping costs from your overall pricing. Still, getting from BOM to COGS to MSRP is often a 4x or 5x multiplier, and the manufacturer is only getting a small percentage of that as net profit.
Don't forget about things like twist ties, cables, packaging, shipping, kitting and fulfillment costs. You'd be surprised how many startups just look at the BOM cost of the thing itself and forget about all the ancillary things that are needed to get that product to the consumer and set it up. You might also be surprised what some of those items cost. It's important to get these things right. If you have to handle a return because the shipping damages the product, then the cost of that support call, and the return logistics has likely just killed any profit, except on super high value items.
Yeah, all the extra costs will add up. We just had a uline catalog shipped to the office. I normally throw it right in the trash. But this time, I flipped through the whole thing for a good 30 minutes to learn more about packaging.
I'd definitely be doing direct to consumer. If it takes off, then I'd need to hire help and go from there, or, quit if I don't want the hassle and go back to a job:)
It’s not easy, and having a network is crucial. I’m not sure I’d do it again, but I’ve lucked out enormously on my day job and am only 3 years out from freelancing, so full nostalgia hasn’t kicked in.
I wouldn’t ignore splitting the difference! Taking your time with full time work and putting up a Kickstarter or Indiegogo when you have a near market ready product ready to go. Cross promoting this type of machine on sites like Hackaday and courting makerspaces are easy entry routes.
I’m working on a machine design myself for a similar set, so I wish you all the best! Everyone so far has had great feedback, and as long as you can meet your needs follow that dream!