I think the 600$ price point was inflated with the Pi and the Arduino being used. Simply changing some parts for cheaper ones would have allowed to reduce the BOM cost and thus reduce the price. The author mentions this in his post.
Also seemingly not a lot of people paid 600$ for the sign, with a lot going for a lot cheaper than that.
Re:Taking over a Dead IoT Company
by FractalParadigm on Tuesday January 10, 2023 @03:54PM
(#34331318)
That's a part of what the article dives into. For example the LED matrix hat they were using from Adafruit was probably the most expensive option they could have used at $25/unit, and the article gave examples of much cheaper (i.e. 10% of the cost) parts that would have done the exact same job with a little extra engineering time/effort. Replacing the Pi with an ESP32 would have saved money, but like the article mentions using a Pi wasn't entirely a bad idea considering the free marketing they got from the foundation.
Re:Taking over a Dead IoT Company
by AceJohnny2 on Tuesday January 10, 2023 @06:53PM
(#34333163)
> It seems like they opted to target the luxury nostalgia market with the $600 price point rather than a more value-driven $300
But they weren't aiming at the $600 price-point. That's just the estimated price-point that OP estimated from the BOM. They were actually selling at much cheaper than that, which probably contributed to their collapse.
It's amazing to me how quickly the company loaded itself up with staff. Being kinda familiar with ESP32 development, I thought at the beginning that the company would have 4-6 people - 1-2 technical, 1-2 production, 1 business/sales/marketing, 1 admin. It seems like they opted to target the luxury nostalgia market with the $600 price point rather than a more value-driven $300, and wrapped themselves in an aura of success rather than growing it naturally. The descriptions on the resumes of the former marketing staff juxtaposed with the business reality was...quite a contrast.
It's especially sad as the basic idea was good and seems sustainable at a lower price point - with a metal/plastic housing it might have been an easy sell to businesses near subway stations, for example, and developing cosmetically different versions for other large cities would be quite feasible. I wonder what made them take the 'growth corporation' approach rather than crowdfunding the prototype > product route, which was fairly well established even 5 years ago. That offers a fairly clear roadmap for new ventures and is sufficiently familiar to consumers that innovators can do some market segmentation and have a cushion of patience to get them though the design to manufacturing transition.
A great case study for anyone thinking about launching a product for fun or profit.