1 00:00:00,000 --> 00:00:05,680 Kevin Mako: Hello, product innovators. Today we learn from the founder of San Francisco's top hardware incubator on how invention startups can 2 00:00:05,680 --> 00:00:08,760 Kevin Mako: succeed by leveraging product design communities and spaces. 3 00:00:12,270 --> 00:00:21,250 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, 4 00:00:21,610 --> 00:00:29,950 Narrator: product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial 5 00:00:29,950 --> 00:00:38,990 Narrator: idea to getting your product on store shelves. taken you step by step to build a functional product and scale your product business. 6 00:00:39,110 --> 00:00:44,770 Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small 7 00:00:44,770 --> 00:00:52,070 Kevin Mako: product businesses. Now, onto the show. Welcome back, everyone. Today, I'm very excited to introduce Alex Dantas to the show. 8 00:00:52,430 --> 00:01:00,490 Kevin Mako: Alex is the CEO of CircuitLaunch, one of California's top hardware accelerator facilities. CircuitLaunch is in almost 40,000 square foot hardware innovation space and 9 00:01:00,490 --> 00:01:06,430 Kevin Mako: makerspace for inventors, hardware startups, and hardware companies. Mako Design is also a long-standing partner in the space. 10 00:01:06,770 --> 00:01:13,470 Kevin Mako: Today, Alex is going to share some valuable knowledge in how inventors, and small manufacturers can utilize facilities like CircuitLaunch to develop their invention 11 00:01:13,470 --> 00:01:17,470 Kevin Mako: product ideas, then scale them to the big leagues. He's also going to give us some advice on what 12 00:01:17,470 --> 00:01:23,430 Kevin Mako: really works to ensure startup success, given the hundreds of startups he's watched come through their doors. Now, on the episode. 13 00:01:24,560 --> 00:01:31,700 Kevin Mako: Hey, Alex, welcome to the show. Thank you for having me. Looking forward to talking to you today about hardware makerspaces, incubators, accelerators, 14 00:01:31,940 --> 00:01:39,940 Kevin Mako: all of that, especially from you, who is the founder and CEO of CircuitLaunch. We're very happy to have you on the show because, of course, you and I've been working together 15 00:01:39,940 --> 00:01:47,300 Kevin Mako: for years now, and Mako Design is very happy to be the design firm of record inside of the CircuitLaunch facility, which is an incredible facility. 16 00:01:47,420 --> 00:01:56,200 Kevin Mako: You've done an amazing job of building something spectacular for the Bay Area in California. But before we get into the tips and tricks to startups and how they can, 17 00:01:56,200 --> 00:02:02,580 Kevin Mako: maximize the value of the education and the communities and everything else that goes around a place like CircuitLaunch. 18 00:02:02,760 --> 00:02:08,380 Kevin Mako: Kick it off with how you got here to this big facility from where you started because you've got an incredible backstory. 19 00:02:08,560 --> 00:02:12,940 Alex Dantas: Wow, Kevin, that's quite a complicated story there, but I would try to do the rundown for you. 20 00:02:13,600 --> 00:02:22,920 Alex Dantas: I'm Brazilian. I was born in Brazil. I went to a mechatronic engineer in high school. Then I went to law school, dropped out of law school to do classical ballet. 21 00:02:23,520 --> 00:02:26,940 Alex Dantas: So I moved to United States to do classical ballet, moved here in the early 22 00:02:28,000 --> 00:02:30,020 Alex Dantas: 2000s. Then eventually I grew out of it. 23 00:02:30,740 --> 00:02:38,100 Alex Dantas: For me, classical ballet was never about to become a professional. It was a very shy person. For me, it was like to be the best person of me that I could. 24 00:02:38,320 --> 00:02:44,860 Alex Dantas: So I never became good at it, but I became a thousand times better than I ever thought it to be. And for me as a personal development, that was amazing. 25 00:02:45,200 --> 00:02:50,040 Alex Dantas: I was in New York for a little while, then moved to the ballot to start a company because I heard that here where the money tree is. 26 00:02:50,040 --> 00:02:53,260 Alex Dantas: you'll find a money tree and then you pick up the $100 bills. 27 00:02:55,000 --> 00:02:59,640 Alex Dantas: Then I started a company. It was a worry ahead of the time at the time. We could not raise money. 28 00:03:00,320 --> 00:03:09,360 Alex Dantas: Then I became homeless. I was homeless for a couple of months living in my car in San Francisco. Then from leaving in my car, this is 2007, 2008. 29 00:03:09,640 --> 00:03:15,360 Alex Dantas: I stopped flipping homes in San Francisco. So I bought it a $800,000 house without having the money to make the first payment, 30 00:03:16,060 --> 00:03:22,660 Alex Dantas: the first mortgage. While leaving in my car. The way how I make that happen was I bought the house in the mission in San Francisco, 31 00:03:22,800 --> 00:03:30,980 Alex Dantas: and I was able to flip one of the units was a duplex within 30 days. So I had $0 living in my car to $30,000 in about 30 days. 32 00:03:31,080 --> 00:03:40,020 Alex Dantas: I sold on Craigslist one side of the house for some of the internet. That was amazing. Actually, I know the person to this day, and it became good partners and good friends. 33 00:03:40,160 --> 00:03:47,700 Alex Dantas: I ended up to join the U.S. Army as a watercraft engineer. After that time, after the 2009 happens, I could not get 100% to finance the house anymore 34 00:03:47,700 --> 00:03:52,200 Alex Dantas: because my business model just worked on that model. Then I joined the U.S. Army as a watercraft engineer, 35 00:03:52,440 --> 00:03:59,560 Alex Dantas: traveled the world with the given support to the Navy Seals and different locations. Then when I got out of the Army, I started a company that didn't work out, 36 00:03:59,800 --> 00:04:06,180 Alex Dantas: then started another company that didn't work out, started another company that didn't work out. Then my fourth company gave me enough money to not have to work for a year. 37 00:04:06,360 --> 00:04:11,660 Alex Dantas: Then I started another company, a secured app that got about three and a half million people to download. 38 00:04:11,820 --> 00:04:20,020 Alex Dantas: After that, I started selling a luxury cars to Brazil and to China. and I sold about $10 million worth of cars. 39 00:04:20,140 --> 00:04:27,440 Alex Dantas: You used only one email address, never had a website, never met one of the clients, and I think I only saw a couple of the cars that I ever sold. 40 00:04:28,980 --> 00:04:35,020 Alex Dantas: And while all that is happening, I rented a office space, and I met the owner of that 41 00:04:35,020 --> 00:04:41,900 Alex Dantas: building, and he's telling me that he has this empty building in Oakland, in California, and it's been empty for about 10 years, and you wanted to do something. 42 00:04:42,020 --> 00:04:47,440 Alex Dantas: You saw me doing stuff with the software side and some other experience that I had. It's like, well, I want to do something with you. 43 00:04:47,560 --> 00:04:56,220 Alex Dantas: I was like, well, I started as a mechatronic engineer. Being a mechatronic engineer is all I wanted to be in my teens because that was my dream to become one. 44 00:04:56,700 --> 00:05:02,620 Alex Dantas: But it's very hard for you to actually do any hardware products because different from software 45 00:05:02,620 --> 00:05:10,780 Alex Dantas: where you can start at a Starbucks with your computer, hardware, as a lot of companies you will tell you is that it's a business from day one. 46 00:05:11,200 --> 00:05:18,100 Alex Dantas: From day one, you have to start thinking about, I think I need office space, I'm going I need this equipment. I'm going to have to hire the one person. 47 00:05:18,920 --> 00:05:27,400 Alex Dantas: And, you know, you have to think much bigger from when you start. Then I'm like, what if we can bring the hard rate community together? And that's how I started CircuitLaunch. 48 00:05:27,860 --> 00:05:30,180 Alex Dantas: We took the 30,000 square feet space was empty. 49 00:05:30,920 --> 00:05:39,260 Alex Dantas: Then we raised some money from the building owner and remodeled the entire thing ourselves. So we put every single carpet pieces that you see on the floor here ourselves. 50 00:05:39,860 --> 00:05:47,680 Alex Dantas: A lot of the furniture initially, we built it ourselves. And we opened up. And slowly, Slowly, we broke it out. 51 00:05:47,740 --> 00:05:55,640 Alex Dantas: We built an electronic lab, a wood shop, and certain areas for common areas for people to not have to buy the equipment, like lasers, 3D printers, and all that. 52 00:05:56,220 --> 00:06:02,320 Alex Dantas: And then little by little, one company came, then another company came, then we fill out of the space, and we build more office, and then we fill those office too. 53 00:06:02,380 --> 00:06:04,280 Alex Dantas: We build a little bit more, and then we fill those office. 54 00:06:04,960 --> 00:06:14,140 Alex Dantas: And then fast forward today, today's CircuitLaunch has 56 companies in the space. We have a turn rate of about 3%, which is much lower than any kind 55 00:06:14,140 --> 00:06:19,140 Alex Dantas: of co-working space that you hear about. But companies here raise about $35 million within the last 12 months. 56 00:06:19,940 --> 00:06:24,200 Alex Dantas: And we grew even in the pandemic, very hard to find places that 57 00:06:24,200 --> 00:06:30,620 Kevin Mako: have all the equipment and everything that you need to build a hardware company. And I hopefully that was not too long of a background. 58 00:06:31,680 --> 00:06:36,660 Kevin Mako: Well, and not only a CircuitLaunch, one of the premier hardware incubation or co-working 59 00:06:36,660 --> 00:06:42,800 Kevin Mako: facilities in California, but you're getting calls all the time for people wanting to spread the model to other places. 60 00:06:42,800 --> 00:06:44,540 Alex Dantas: You've got major companies in there, too. 61 00:06:45,380 --> 00:06:52,960 Alex Dantas: Kickstarter, Google Ventures, et cetera, is all in the space, right? And a number of others too. We have a lot of Google companies here. 62 00:06:53,120 --> 00:06:58,700 Alex Dantas: We have a lot of funded company that come out of Google here. The same might have a lot of company that came out of Stanford here. 63 00:06:59,520 --> 00:07:08,420 Alex Dantas: And some of the MIT, Carnegie Mellon, a company that's kind of like started on those and flipped and where they can end up creating their own wings and they have to leave and 64 00:07:08,420 --> 00:07:14,520 Alex Dantas: that they are here. It's been an incredible ecosystem. And I'm blessed to feel like every day I get to speak to people. 65 00:07:14,540 --> 00:07:18,040 Kevin Mako: that know the subject a hundred times more than I'll ever know. 66 00:07:18,860 --> 00:07:23,840 Kevin Mako: And it's just like, it feels like a lesson to me every single day when I walk around and talk to people. Well, it's been great. 67 00:07:24,060 --> 00:07:32,120 Kevin Mako: I appreciate working with your clients there and as well as having our little home within the facilities too. And, you know, one of the big things I think so valuable. 68 00:07:32,380 --> 00:07:36,740 Kevin Mako: And of course, together we're going to do a lot of is the education and programming events. So let's start there. 69 00:07:36,880 --> 00:07:44,400 Kevin Mako: Like first and foremost, you mentioned the word hardware community. This isn't just a co-working space that has a, you know, great tool shop and all the, 70 00:07:44,540 --> 00:07:54,220 Kevin Mako: toys and bells and whistles to build and prototype and play around with hardware inventions and gadgets, but it's really creating a community and an ecosystem around that. 71 00:07:54,360 --> 00:07:57,320 Kevin Mako: And that is what is so valuable to hardware startups. 72 00:07:57,460 --> 00:08:05,120 Alex Dantas: Can you speak a bit more about that and how that's created a lot of value to the folks that have come through your facilities, either as a tenant or are 73 00:08:05,120 --> 00:08:11,480 Alex Dantas: either as a general community member? The number one thing that will go, our number one mission when we started was us to bring the community together. 74 00:08:11,600 --> 00:08:18,460 Alex Dantas: We didn't have a business model. We had no idea how we're going to make this work was just how let's bring out people together that was kind of the 75 00:08:18,460 --> 00:08:23,940 Alex Dantas: goal because when i moved here i felt that it was hard for me just to meet the hardware folks uh 76 00:08:23,940 --> 00:08:33,140 Alex Dantas: i think we're more enclosed than the software people are because there's a lot more tools for software out there hardware was it was it's getting much better now uh to 77 00:08:33,140 --> 00:08:38,680 Alex Dantas: get together with the hardware community so the idea was that it's like and how do we do that it's like well 78 00:08:38,680 --> 00:08:46,220 Alex Dantas: there's offer everything that makes it like easier for them let's make everything um you know At the beginning, we gave a lot of free space. 79 00:08:47,280 --> 00:08:51,640 Alex Dantas: We talked to everyone. We follow them closely. We helped them out when they couldn't pay the rent. 80 00:08:53,540 --> 00:09:03,190 Alex Dantas: We did everything that they could not possibly find in someplace else, which at the end of the days is what the community means is finding some people. 81 00:09:03,410 --> 00:09:11,410 Alex Dantas: A common goal group of people that have a common problem in trying to solve that one problem for that common group. 82 00:09:12,280 --> 00:09:19,420 Alex Dantas: And that's kind of a heavy beauty community. I also being blessed that early on, we had Dan Omar, which is one of my partners. 83 00:09:20,200 --> 00:09:24,400 Alex Dantas: And he helped build the community at the booster boards. 84 00:09:25,460 --> 00:09:31,220 Alex Dantas: So Dan was very familiar. Also, Dan was part of the tech shop, which is another company. I used to exist in the Bay Area that doesn't anymore. 85 00:09:32,360 --> 00:09:38,860 Alex Dantas: And Dan had a lot of experience in telling me, you know what, we shouldn't do this. You shouldn't do that. That's where are you going to do it. That's how we're going to do this. 86 00:09:39,240 --> 00:09:42,400 Alex Dantas: And they helped out a lot. And it started with that one person, though. 87 00:09:42,640 --> 00:09:47,420 Alex Dantas: I still think like every time people sometimes they think about community, they think like about a stadium full of people, right? 88 00:09:48,220 --> 00:09:49,460 Kevin Mako: It's start with that one person. 89 00:09:49,920 --> 00:09:51,740 Alex Dantas: It's one person and then another person. 90 00:09:52,140 --> 00:09:58,400 Kevin Mako: It's a very linear mathematics that goes. And at some point, it becomes exponential. 91 00:09:58,740 --> 00:10:04,700 Kevin Mako: But for a while, it's just one plus one plus one plus one until you bring all this together. 92 00:10:05,550 --> 00:10:09,450 Kevin Mako: That's amazing. And it worked out, right? You're at full capacity now. Right, right. 93 00:10:09,550 --> 00:10:10,970 Alex Dantas: Yeah, 100% occupation. for a while. 94 00:10:11,810 --> 00:10:19,410 Alex Dantas: Yeah, that's an amazing story. Well, in terms of the value to startups, as an emerging startup or a scaling startup, 95 00:10:20,450 --> 00:10:30,390 Alex Dantas: why should they think about being a part of a community like this? What value is there to them in joining this as opposed to building the thing out of their garage? 96 00:10:31,510 --> 00:10:36,010 Alex Dantas: Most of because of being a product yourself sucks. It's a very lonely process. 97 00:10:37,730 --> 00:10:47,210 Alex Dantas: It's lonely for the entrepreneur's low. lonely everywhere, but specific for the hardware, because you need all this stuff that you kind of don't have. 98 00:10:48,200 --> 00:10:52,120 Alex Dantas: And it's hard for you to bring all the expertise in one person. 99 00:10:53,140 --> 00:10:56,360 Alex Dantas: You need to be where all the people that can help you are. 100 00:10:57,100 --> 00:11:05,180 Alex Dantas: And building a hardware product, it takes a little longer than building a software product and requires a way more skills than you have on a software 101 00:11:05,180 --> 00:11:11,300 Alex Dantas: side. Because, you know, we have industrial design and you have people that have to interest in materials depending on what kind of stuff you're working on it. 102 00:11:11,640 --> 00:11:15,960 Alex Dantas: And you have to have some people that understand a little bit of business so you don't build something that nobody actually want to 103 00:11:15,960 --> 00:11:22,180 Alex Dantas: buy. You also have to get people like to understand how to actually make a product. That's where 104 00:11:22,180 --> 00:11:27,280 Alex Dantas: I think macrodesigns are amazing at making this, which is amazing to me how you focus on this. One 105 00:11:27,280 --> 00:11:34,820 Alex Dantas: needs you just working with startups, which almost nobody wants to work with because it's like they're hard to work with. 106 00:11:34,920 --> 00:11:42,760 Alex Dantas: And the macroecker's perfected this in a way that will take that person that's struggling in the garage working alone that will come to a community like ours 107 00:11:42,760 --> 00:11:52,750 Alex Dantas: and then you can actually get them to build a product actually build the product and he's the tip for a lot of entrepreneurs out there that are working out of your home 108 00:11:52,750 --> 00:12:02,330 Alex Dantas: or trying to figure out what you want to do. Building your product is the most important thing that you can get a value on your hardware startup. Let me rephrase that. 109 00:12:03,780 --> 00:12:07,040 Alex Dantas: Deploying or making your product 110 00:12:07,040 --> 00:12:08,980 Kevin Mako: and actually get into a place where you can show 111 00:12:09,000 --> 00:12:13,860 Alex Dantas: to all the people that you have a product is the most important thing that you need to do right now. 112 00:12:14,470 --> 00:12:21,110 Alex Dantas: Anything else that does not accomplish that goal as fast as you can, it's completely irrelevant at this stage. 113 00:12:22,320 --> 00:12:26,680 Alex Dantas: Software people, they figure this out 114 00:12:26,680 --> 00:12:34,520 Kevin Mako: that they can just go to an idea to most of investors and tell them this how I'm going to do it. And they will understand it because they've been around the process. 115 00:12:34,680 --> 00:12:41,220 Kevin Mako: So they'll say, oh yeah, I can see you doing that. And if you have the skills, hardware investors believe when they see it. 116 00:12:42,190 --> 00:12:52,030 Kevin Mako: And feel it. They need to see it. Right. They need to see it. You need to feel it. So whatever you are, if you have a community, close to your home 117 00:12:52,030 --> 00:12:55,650 Kevin Mako: and close to where you are, please join the community will make your process much, much faster. 118 00:12:56,570 --> 00:13:00,610 Kevin Mako: Don't try to do hardware alone. It takes longer. It's frustrating. 119 00:13:01,510 --> 00:13:06,880 Kevin Mako: And there are a lot of options for you to do this with the community. Yeah. And it's amazing because there's so much. 120 00:13:06,900 --> 00:13:15,880 Kevin Mako: happening in every major city that's helping evolve the support network and the communities around hardware specifically. 121 00:13:16,120 --> 00:13:18,060 Kevin Mako: And CircuitLaunch is a great example of that. 122 00:13:19,020 --> 00:13:21,180 Kevin Mako: Obviously, San Francisco is known for their software. 123 00:13:22,100 --> 00:13:30,260 Kevin Mako: But hardware is a big component of it. And there's been a ton of billion dollar hardware companies that have come out of San Francisco in the Bay Area. So what a better 124 00:13:30,260 --> 00:13:33,920 Kevin Mako: support network than to have a physical space that you can bring all these different partners 125 00:13:33,920 --> 00:13:40,360 Kevin Mako: and players together, but as well as having a lot of other people that are going through a similar journey. And this is something that's so amazing about CircuitLaunch. 126 00:13:40,480 --> 00:13:49,540 Kevin Mako: And you've seen this, Alex, you've watched dozens and dozens of hardware startups come up through your programs. And you're seeing what kind of works and what doesn't work. 127 00:13:49,680 --> 00:13:59,600 Kevin Mako: And that knowledge can be shared so quickly amongst the new and emerging upcoming startups that are coming through, both on the initial ideation phase, but also as they're scaling. 128 00:13:59,920 --> 00:14:03,680 Kevin Mako: Those are two different things. First, you have to build it. And then you're going to raise a bunch of money. 129 00:14:03,920 --> 00:14:08,000 Alex Dantas: you're going to start pre-selling or whatever it is to get some money in the door, then you have to scale it up. 130 00:14:08,300 --> 00:14:15,540 Alex Dantas: How do you go from selling 100,000 to 500 to 5,000 to 50,000 and so on, right? And that's kind of the evolution of a hardware product. 131 00:14:16,080 --> 00:14:22,980 Alex Dantas: But all of that can really be helped and supported by your local incubation hub community, 132 00:14:23,340 --> 00:14:32,020 Alex Dantas: et cetera, right, no matter what stage of the plan that you're at. Which brings me to another topic, Alex, I'd like to talk to you about because you're 133 00:14:32,020 --> 00:14:39,420 Alex Dantas: seeing it happen like right in front of your face. And it's this concept of local short run manufacturing to get a product off the ground and test marketing. 134 00:14:40,120 --> 00:14:47,700 Alex Dantas: What are your thoughts about that? Where do you see that going? And where does a place like CircuitLaunch help fill the void there? Right. So after seeing 135 00:14:47,700 --> 00:14:54,020 Alex Dantas: a few hundred companies come out of here and then going through the same process, I found a common thread, which happens, I'll say, 80% of the time. 136 00:14:54,500 --> 00:15:02,680 Alex Dantas: For those lucky ones that manage to raise a little bit of The first thing they do is they think now they will take that money, they can hire 137 00:15:02,680 --> 00:15:11,020 Alex Dantas: the best people that they can possibly find. And they go, they spend a lot of time trying to fight those people or trying to find contractors 138 00:15:11,020 --> 00:15:14,480 Alex Dantas: that will feel like the void of one specter and other here. 139 00:15:15,220 --> 00:15:18,280 Alex Dantas: Then they spend 75% of the money trying to do that process. 140 00:15:19,240 --> 00:15:27,360 Alex Dantas: Almost 100% of the time, it does not work. So when they get to the end of that period, like where they have like, you know, about 20% left over in the bank. 141 00:15:27,960 --> 00:15:32,940 Alex Dantas: And they realize, oh, I made all these mistakes because, you know, as an entrepreneur, you're going to make all the mistakes. 142 00:15:33,160 --> 00:15:39,020 Alex Dantas: And the hardware, they're expensive mistakes because you don't have a lot of money and it takes more money for you to build a product than you'll build a software. 143 00:15:40,840 --> 00:15:46,620 Alex Dantas: Then you spend the money and then now we have this little B and realize, oh, my God, now I have to do the product myself. 144 00:15:46,760 --> 00:15:55,520 Alex Dantas: And you scramble and you go after you get trained, you'll do everything you can to build a product yourself. But most of the times at that point, it's too late. 145 00:15:57,450 --> 00:15:59,190 Alex Dantas: So that process has to be inverted. 146 00:16:00,620 --> 00:16:06,220 Alex Dantas: Entrepreneur should be able to build the product from the beginning. It should be, again, like I said before, 147 00:16:06,340 --> 00:16:10,220 Alex Dantas: it should be the first thing you should be worried about is just get something out, 148 00:16:11,300 --> 00:16:13,780 Alex Dantas: rough and evidence, and you should try to do that yourself. 149 00:16:14,440 --> 00:16:18,700 Alex Dantas: And this is probably, there's an argument on the side of this, then they probably shouldn't. 150 00:16:19,420 --> 00:16:25,160 Alex Dantas: I thought that one is such a launch as well, that they shouldn't do it. They should actually go to China or they should go to someplace else 151 00:16:25,160 --> 00:16:27,780 Alex Dantas: and then, you know, because they are cheap, and then you can do all of this. 152 00:16:28,500 --> 00:16:33,000 Alex Dantas: I thought this when I started a CircuitLaunch as well. What I've learned is that is a very bad idea. 153 00:16:33,900 --> 00:16:40,460 Alex Dantas: And trust me on this, which is that if you are a hardware entrepreneur right now, please try to develop the product your own. 154 00:16:42,120 --> 00:16:48,660 Alex Dantas: Find people that will develop that product for you, that you know for sure that you can get something out of complete. 155 00:16:49,810 --> 00:16:56,070 Alex Dantas: And those skills are very, very hard for you to find when you're just starting out and you have very little money, 156 00:16:56,070 --> 00:16:59,330 Alex Dantas: because you're going to make a lot of mistakes and get into the process. 157 00:17:01,350 --> 00:17:07,590 Alex Dantas: So what I've seen is, like, the must need that I see right now on a hardware product, it's actually not on the factory side. There's factors everywhere. 158 00:17:07,870 --> 00:17:12,170 Alex Dantas: There's factors when you get to high scale, you get thousands and thousand pieces. That problem is solved. 159 00:17:12,790 --> 00:17:20,530 Alex Dantas: When you get to thousands and thousand pieces where you have a demand for that many, there's tons of factories anywhere in the world, even in the United States, 160 00:17:20,970 --> 00:17:25,990 Alex Dantas: that will help you, will give you credit to build a product. There will be all over you to actually build the thing for you. 161 00:17:26,770 --> 00:17:32,150 Alex Dantas: The problem is when you have to build those few hundred for the first thousand pieces. 162 00:17:32,930 --> 00:17:38,010 Alex Dantas: And the model that I see evolving right now is like we need a type of place that is not a factory, 163 00:17:38,600 --> 00:17:46,280 Kevin Mako: but it's also not a prototyping or just make a space only. Is this thing in between that we call co-factory? Co-factor is a place right here. 164 00:17:46,340 --> 00:17:55,580 Kevin Mako: You're able to build your own, your first few units, that you have enough expertise in that place. They'll help you build from idea to a production of about 165 00:17:55,580 --> 00:17:56,440 Kevin Mako: 200 units. 166 00:17:57,440 --> 00:18:06,280 Kevin Mako: And that is the model that I think United States, North America actually, and it's the most. It is focused on those first few hundred pieces, which is, does 167 00:18:06,280 --> 00:18:12,500 Kevin Mako: not require all the million dollar equipment for you to do it. Now, because at the day, when you're building a prototype, you're doing pretty much five things. 168 00:18:12,620 --> 00:18:15,060 Kevin Mako: You're cutting, you're adding, you're shaping, and you're gluing together. 169 00:18:15,770 --> 00:18:21,850 Kevin Mako: It's those five things that you work into doing. And you have a facility that will help you and train you to do those five things. 170 00:18:22,130 --> 00:18:30,590 Kevin Mako: And they'll get you to those few hundred pieces or the first 10. Once you're done with that, your job becomes so much easier because you understand your product. 171 00:18:30,770 --> 00:18:37,310 Kevin Mako: You have something you can show investors. And now investors will be more willing to take a higher risk in you because you've got the product out. 172 00:18:39,000 --> 00:18:44,880 Kevin Mako: So cofactures is, I think, where this place should go. Like that's where all this facility should become. That's very powerful stuff. 173 00:18:45,080 --> 00:18:50,200 Kevin Mako: I've talked about it a few times on the show before of the emergence of what we call short-run 174 00:18:51,220 --> 00:18:56,020 Kevin Mako: manufacturing, manufacturing even as low as 10 units, maybe 50, 100. 200 units. 175 00:18:56,700 --> 00:19:00,820 Kevin Mako: You're not going to make money on these cash flow-wise when you sell these products, 176 00:19:00,880 --> 00:19:06,900 Kevin Mako: but it doesn't matter because you've now exponentially increased the equity and intellectual property value of your product. 177 00:19:07,140 --> 00:19:14,740 Kevin Mako: You've now proven, even if it's only 50 units, that somebody out there was willing to whip out their credit card, or even if you gave them away one way or another, 178 00:19:15,240 --> 00:19:23,200 Kevin Mako: they wrote a raving review about your product, either internally or even pet or publicly on the internet. They said, I've tried the first edition of this. 179 00:19:23,260 --> 00:19:30,140 Kevin Mako: Maybe you call it the pre-release edition or whatever you want to call it, short run, produced units, really working in people's 180 00:19:30,140 --> 00:19:35,920 Kevin Mako: hands, giving them the ability to say that they love the product. You are now in production. 181 00:19:36,220 --> 00:19:43,280 Kevin Mako: Yes, it's only a small amount of units, but the bigger corporate player is somebody who's either going to invest in you, acquire you, or partner with you, all they care about 182 00:19:43,280 --> 00:19:51,400 Kevin Mako: is that you have some users in some market that thinks the amazing product. Because, of course, they're the ones who know how to scale it exponentially from there. 183 00:19:51,820 --> 00:19:58,340 Kevin Mako: So you don't need to convince them that there's a much bigger market. out there. That's their job. They're in that industry, especially if they're a distributor, 184 00:19:58,540 --> 00:20:04,300 Kevin Mako: wholesaler, retailer, you name it. They know product sales. What they don't know is your product because it's unique, it's new. 185 00:20:05,180 --> 00:20:10,680 Kevin Mako: And you've got two things that you're focusing on there. One, like you said, Alex, is the technical side. And I absolutely love how you said, 186 00:20:11,240 --> 00:20:12,840 Kevin Mako: essentially your model is build at first. 187 00:20:13,720 --> 00:20:20,400 Kevin Mako: Especially if you get to that point where you do raise a bit of money, a seed round, if it's, you know, anywhere from 50K to a million dollars, 188 00:20:20,540 --> 00:20:29,760 Kevin Mako: if you've raised that round and you're spending most of it on, let's called a business development services, not a good place for a hardware company to start. All of that funding, 189 00:20:29,880 --> 00:20:33,280 Kevin Mako: and obviously I'm going to be biased as I run a design for it. But the reality is, and you've seen 190 00:20:33,280 --> 00:20:38,760 Kevin Mako: it now with hundreds of startups that have come through, if you focus on building a great product first, the business will follow. 191 00:20:39,640 --> 00:20:46,960 Alex Dantas: Guy Kawasaki says the exact same thing. In fact, he goes one step further. He says, you build a phenomenal prototype, let alone if you, this is well before the short run 192 00:20:46,960 --> 00:20:55,020 Alex Dantas: manufacturing era. But he said, if you build a great prototype, you will never need to do a PowerPoint, a spreadsheet, a presentation ever again. 193 00:20:55,440 --> 00:21:04,300 Alex Dantas: You will bring that product and sit it in front of people and say, this is my product and here's how it works. That is really a big core in the early stages of a product business. 194 00:21:04,740 --> 00:21:13,300 Alex Dantas: And then, of course, that model inverts over time. As you scale and as you grow, more and more money will then flip over to the business development, sales, marketing, 195 00:21:13,640 --> 00:21:18,940 Alex Dantas: etc. Less and less will go into the R&D, but always still some to continue to improve. That model will 196 00:21:18,940 --> 00:21:27,380 Alex Dantas: shift, but so many startups look at it backwards because they're learning from the classical textbook language of big corporate product firms. 197 00:21:28,020 --> 00:21:37,040 Alex Dantas: Big corporate product development always basically looked at it on an upside down triangle. Big millions of dollars spent on marketing and case studies 198 00:21:37,040 --> 00:21:41,280 Alex Dantas: and user studies and all that and eventually funneling down at the end of the day, hopefully just some product that gets made. 199 00:21:41,500 --> 00:21:48,880 Alex Dantas: Well, as a startup, you need to invert that the other way around. You need to flip that triangle and get your product built, get to market, then start building the 200 00:21:48,940 --> 00:21:56,500 Alex Dantas: business from there. Right. One thing that we got really excited when I met you, and I brought that, you know, that I met you back to the team. 201 00:21:56,600 --> 00:22:01,890 Alex Dantas: And I was like, look, if we can partner with this company, this is the company that we need to part with it. 202 00:22:03,760 --> 00:22:11,140 Alex Dantas: Because one philosophy that we took from the beginning of the building CircuitLaunch, again, focus in communities that we did not take equity into the companies. 203 00:22:12,340 --> 00:22:17,640 Alex Dantas: We are not here to tell you or we don't accept exclusive deals with any other companies. 204 00:22:19,360 --> 00:22:28,780 Alex Dantas: to use this software or just use this one material here, all in that, because it's not our place to tell the companies where they should be doing. 205 00:22:29,240 --> 00:22:32,500 Kevin Mako: They're going to be told us what they need, and then we're here to serve that. 206 00:22:33,160 --> 00:22:39,380 Kevin Mako: And by messing up the equity and all that, we thought that we'll paint the community aspect of it. 207 00:22:39,820 --> 00:22:45,300 Kevin Mako: And then when we met you and hearing about how focused you are just in that one niche, 208 00:22:46,960 --> 00:22:53,360 Kevin Mako: because I'll open just a side comment here. here because it's important for people to know, there is a lot of pictures that will tell you 209 00:22:53,360 --> 00:22:55,020 Kevin Mako: that they want to work with you with startups. 210 00:22:55,960 --> 00:23:00,840 Kevin Mako: And a lot of them are well-intended. But the point is that they don't know how. 211 00:23:02,170 --> 00:23:11,130 Alex Dantas: And they think that, you know, they will work just with few startups and maybe half of them will become a big run product that they 212 00:23:11,130 --> 00:23:17,890 Alex Dantas: will end up making money of it. But that's not how it happens. Most of startups will have a hard time actually doing by those 213 00:23:17,890 --> 00:23:26,210 Alex Dantas: field that will actually make it, will make a gigantic profit, but it's hard for you to find those fields as a factor because your interest is not aligned. 214 00:23:26,750 --> 00:23:31,710 Kevin Mako: And then how they're going to build our products different as well, because they are already thinking, like, you know, how it'll be 215 00:23:31,710 --> 00:23:39,840 Kevin Mako: this for a skill. And you don't need that at that point. Not at that point. You just need a product up. So when I found microdesign, and I was like, this is 216 00:23:39,840 --> 00:23:49,600 Kevin Mako: the company that we need to partner with it because they are focused only on the people who will know the factors are not going help. And he's been doing this for 20 years. 217 00:23:50,280 --> 00:23:54,600 Kevin Mako: So, you know, that process took a little while for us to, for us to unite to get in bed together. 218 00:23:55,460 --> 00:23:56,340 Kevin Mako: Well, I appreciate it. 219 00:23:56,460 --> 00:24:02,200 Alex Dantas: It's been great. And the reality is, is there's not a lot of places out there, whether it be CircuitLaunch or 220 00:24:02,200 --> 00:24:05,560 Alex Dantas: Mako Design or other players that you've brought into the full that help with the early stage 221 00:24:05,560 --> 00:24:10,660 Alex Dantas: companies. But you and I believe heavily that it's the small businesses, especially in the hardware 222 00:24:10,660 --> 00:24:15,160 Alex Dantas: space, which are leading most of the innovation, especially these days, big companies are spending 223 00:24:15,160 --> 00:24:20,220 Alex Dantas: less money on their own internal R&D, and simply they're allocating more money to acquire 224 00:24:20,220 --> 00:24:26,740 Alex Dantas: those small startups, either acquire or partner with or license or fund, those small startups which can fit into their ecosystem. 225 00:24:27,180 --> 00:24:33,780 Alex Dantas: So they're leaving it to the world to develop the products, right? Right. I also say that companies, hybrid companies are getting smaller because with automation 226 00:24:33,780 --> 00:24:37,620 Alex Dantas: is making each time easier and easier for you to make your own product. 227 00:24:38,280 --> 00:24:44,600 Alex Dantas: So, you know, focus on that segment of the market where everything starts, I think is the most important, 228 00:24:45,160 --> 00:24:52,980 Alex Dantas: to a location that someone has to make, it's in those beginning states. Because when you come, when you overcome those hurdles, and then there's like all this market 229 00:24:52,980 --> 00:24:55,080 Alex Dantas: for you, all this things that opens up for you. 230 00:24:56,590 --> 00:25:02,710 Alex Dantas: Alex, appreciate all that. And it's really good insights. And I appreciate your inside tips on how hardware startups, how it actually works. 231 00:25:03,010 --> 00:25:08,490 Alex Dantas: And what you've seen in terms of watching hundreds of startups come through your program, let alone all the others that you've dealt with in your past. 232 00:25:08,870 --> 00:25:12,330 Alex Dantas: If people want to learn more about CircuitLaunch, what's the website to go to? 233 00:25:12,770 --> 00:25:17,530 Kevin Mako: And what can they, where can they learn more? And talk a bit about you're starting to run a bunch of events again as well. 234 00:25:17,710 --> 00:25:22,870 Kevin Mako: Now that hopefully COVID's slowing down and you're getting back into those big multi-hundred 235 00:25:22,870 --> 00:25:29,030 Alex Dantas: or even I heard you have 1,200 people out there for the most recent event at circuit. Right. So I want to do that's amazing for the robot block party. 236 00:25:29,110 --> 00:25:36,910 Alex Dantas: So we're doing the robot block party every we're going to do every six months. We do together with Silicon Valley Robotics, which is a nonprofit organization who helps a lot of the 237 00:25:36,910 --> 00:25:37,590 Alex Dantas: hardware community. 238 00:25:38,710 --> 00:25:44,670 Alex Dantas: And Andre Kay is the one who puts this event together. We do it in a collaboration here. 239 00:25:45,400 --> 00:25:50,820 Alex Dantas: We'll also do a lot of the DIY robot cars, autonomous cars, raised. If you want to know about us, just go to CircuitLaunch.com. 240 00:25:52,730 --> 00:26:00,610 Alex Dantas: And we'll also be launched an education program soon. The idea is that all this place are evolving to become the kind of school that we would like to go to. 241 00:26:01,650 --> 00:26:10,810 Alex Dantas: And we're, I believe that eventually place like CircuitLaunch can become a very good alternative for a four or five universities on a mechatronic site. 242 00:26:11,110 --> 00:26:19,530 Alex Dantas: Because right now, universities mostly have the monthly, monopoly on lab space for education because 243 00:26:19,530 --> 00:26:27,370 Alex Dantas: companies don't have time to train because they know they spend a lot of money and they want to produce and the universities the ones who can afford 244 00:26:27,370 --> 00:26:33,010 Alex Dantas: a nice lab they only can have X amount of students at the same time and you know it has a rotation 245 00:26:33,010 --> 00:26:39,150 Alex Dantas: every four years you have to kick them out where do they go that's like hopefully circuit 246 00:26:39,150 --> 00:26:48,440 Alex Dantas: launches the home for them that's like we'll build it this whole thing that comes together from the beginning from the education to getting them to build their own product and 247 00:26:48,440 --> 00:26:51,020 Alex Dantas: hopefully helping them them to start their own company. 248 00:26:51,700 --> 00:26:56,740 Alex Dantas: Amazing, Alex, great stuff. And as always, I'll put all the links in the show notes below so anybody can just click, click through. 249 00:26:57,260 --> 00:27:03,760 Alex Dantas: Alex, thanks again for all your tips, workers of wisdom and explaining what's going on in CircuitLaunch. We will be talking to you soon. Appreciate it. Thank you, Kevin. 250 00:27:03,920 --> 00:27:06,180 Alex Dantas: Looking forward to 2022. Take care. You too. Bye. 251 00:27:06,660 --> 00:27:13,380 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes. 252 00:27:13,400 --> 00:27:19,520 Narrator: to bring your product to market and turn it into a big success. This podcast series is brought to you 253 00:27:19,520 --> 00:27:29,460 Narrator: by Mako Design + Invent, the original and leading firm in North America to provide global caliber in-to-in physical consumer product development to 254 00:27:29,460 --> 00:27:38,700 Narrator: startups, inventors, and small product business clients. If you're looking for product development help on your invention, head over to MakoDesign.com. 255 00:27:38,860 --> 00:27:47,820 Narrator: That's M-A-K-O Design dot com. For a free consultation, from one of Mako Design's Ford Design Studios from coast to coast. 256 00:27:48,040 --> 00:27:50,160 Narrator: Thanks for listening and see you next time.