Frequent visitors of this blog might have been wondering what the heck I have been doing all this time. Well, the answer is “I ‘ve been trying to get the prototypes business going”. This post is about all those messy details of this effort that would otherwise go unnoticed. Initially, I did not really think that all this crap was worth posting. After giving it some thought, however, it struck me that all stumbling upon the details that follow was very similar to every other debugging session described in other posts of this blog. Here are the details, then.
To begin with, I am not a company and I do not own a company. According to the Greek Revenue/Tax laws, buying and selling stuff is “commerce” (well, in a sense this may really be so) and this is an activity that individual taxpayers are not allowed to have. Instead, individuals must form a individual-owned company, which is then required to have its own VAT number and do its own accountant bookkeeping. In real life terms, this meant that, in order to sell the prototypes, I would have to spend some weeks in various public sector services (Greece is notorious for its bureaucracy levels) to start up this company, plus a non-negligible amount of money for just being allowed to do business (I don’t know if you read the papers, but Greece is also — and lately it is becoming more and more — notorious for taxing and charging with dire cruelty everything that breathes, moves, eats or speaks). I would also need to pay an accountant to get me through the maze of legal procedures concerning financial activities, bookkeeping, logistics, etc. OK, if one is planning to open a shop or a production line, maybe all this is worth the trouble. For just selling a bunch of prototypes at bare cost price without profit, it does not really make any sense.
So then, it was clear that I had to act differently. As I already said, I came in terms with a company owned by some friends, who would undertake all the logistics, accounting, and bookkeeping, while I was to coordinate the thing. That agreement having been made, I just went on and compiled my first basket from Mouser, and then went back to my friends and said to them: “OK, we are now ready to begin, please go to this URL, use that username and password to log-in, and then a cart is waiting for you; all you have to do is click the checkout button — and pay for the order, of course”. Ideally, this would take less than one working day of waiting and less than ten minutes of actual work, but it turned out that the world is not such an ideal place… Day after day, I was trying to reach out the people I had come in terms with, ask why they had not yet checked out the basket, and kindly urge them to do so. The answer I kept getting back was, something like “Sorry, I was terribly busy today, I ‘ll do it first thing in the morning tomorrow”. And the thing went on like this.
All this delay was making me really anxious. As the hardware-experienced readers will know, electronics stock houses do not keep materials in stock forever. These days, only Mouser seemed to have the Silabs chips in-stock, and if they went out of stock, the lead time to re-order would be in the order of six to twelve weeks. OK, Mouser had a good number stocked, however nothing precluded a potential buyer from ordering the whole stock at once. The chances of that happening were very very low, but the risk of delaying the prototypes business for months was one that I wasn’t willing to take. So, every day that went off without my friends checking out that damn Mouser basket was a source of frustration for me.
After almost two weeks of anxious waiting, unanswered calls, SMS messages and mails, I decided that this was not going to work. I loved — and still do love — my friends, but if it took them weeks to click on a checkout URL, then it would take us ages to just gather all required materials — not to speak about what would happen with assembling the boards. Fortunately, I had a backup scenario already in place: a second company that I had come in similar terms with, who proved to be much more available. It took just a phone call to agree on a meeting date in order to click the checkout URLs together. That should do it, and that should be all.
Nope, it wasn’t all. To begin with, I had to create a bunch of new web accounts for the second company, something I had already done once for the first one. Sure, that was not that hard — at least not in principle, because at the Elektor PCB service/Eurocircuits site, where I decided to re-order my prototype PCBs, another unpleasant surprise waited for me. I created the account, I uploaded the latest Gerber PCB files, I specified the quantities, I calculated the price and then — where is the “Submit” button? Believe me or not, there was no “Submit” button! I know it ought to be there, because I had used it before. Initially I tried the Elektor site, and when I saw the bug, I tried the Eurocircuits site (the latter is an OEM of the first, and what is worse, if you try to work on both sites at once, they sometimes get confused and redirect you to one another — but this is a different story). No “Submit” button there, either.
A quick phone call to Eurocircuits did not buy me a lot. They said this was a problem they had seen before but they did not know what was causing it, they asked me to submit a screenshot and let them know my user id in order to try reproducing the problem. I sent them that, however I did not receive an immediate feedback (such as a mail saying, e.g., “we verified that this bug exists and are working to fix it”). Then, after spending some good time on their web site, I accidentally browsed to the accounts management page. There, I suddenly noticed that the company account I had just created had a missing field. This field was called “Initials”, and was not present at all in the registration page, so it would have been impossible to fill it in at first. Nevertheless, on the accounts management page, this very field was marked “required” with a red star. As soon as I put some crap text in it (I didn’t really know what “Initials” would stand for to make it a required field), submitted the change and went back to the orders page, the “Submit” button magically appeared. Shoot…
Nope, this was not all. Together with my friend at the second company, we went through the submission with Mouser, he gave his credit card information and all went fine. Not for long, though: some hours later I received a mail from Mouser’s credit department, saying that the credit card had failed authorization (jeez, why did not that show up when we were checking out our order?). However, my friend was swearing that he had payed for this credit card this very morning. So, what was wrong then? The truth did not shine until a day later: the company had a special arrangement with its bank, with two company credit cards that were fed from the same company bank account. However these two were still behaving as two different credit cards. When money was deposited to the bank account, that did not act as a common pool for both cards; instead, using some algorithm — unkown, even to the bank’s representatives to which my friend spoke over the phone — money was put into one of the credit cards (e.g., the one with the shortest remaining time limit, or the one with the highest debt — the bank’s representatives were not able to tell). Obviously then, my friend had used the wrong card, since money had gone to the other one. [If you find that doing business that way is fascinating, I can give you the name of the bank]. Running the order again with the new card fixed the problem, and now most of the required materials were on their way. Pheeww!…
Not all materials are from Mouser. Some I have ordered from Farnell, and some others I was able to find in retail stores cheaper than I would find them in any components stock-house. So I am still waiting for more materials to ship or to arrive. I have to say that this whole optimization work is very cumbersome. It is also very frustrating to find out right after you have ordered 200 pieces of component XYZ costing something like 50 EUR/USD, you could just as well have ordered the same component from retail or from another stockhouse at half the price. Sometimes even these numbers are misleading: Digi-key orders are subject to import taxes, so one might pay an undetermined amount on the top of the list price of each material.
The bottom line is that it requires an expert in the electronics market to make this whole business run as cheap as possible. I don’t know how much of an expert I am, but I tried to optimize as much as it made sense the cost of my BOM. I have decided to offer 50 prototypes (assembled and DIY kits included), so the economies of scale I could achieve were elementary. With the optimizations I was able to make, the BOM, including PCBs and all materials, amounted up to something between 1,200 and 1,400 EUR. There are some cases where VAT would be added, so this would be higher (if you allow me to become a bit sarcastic, Greece –striving, as maintained by its political leaders, to make its economy more competitive — has increased the VAT coefficients from 19% to 21% and then again from 21% to 23%, and this means that imported materials from other countries might cost 23% higher than if I set up this whole prototyping business in China or India — hey, Mr. Government, you’re doing a great job in saving my country! Keep it up like this!). Anyway, this means that a bare DIY prototype (no assembly, no testing, no guarantee it is going to work) will cost something in the order of 35.00 EUR plus P&P.
Besides optimizations based on large quantities and cheapest material selection, there are quite a few optimizations that I plan making on the board itself. For example, the double SMD DIP switch is not cheap at all. In a production version of the board, this would not need to be present, since it is easy to tell the firmware to jump to Flash-programming mode by just a simple command over USB. If need be, an SMD open contact can act as a switch by short-ing its contacts when the board boots. And there are many other optimizations, only I feel this is not exactly the time to start this discussion. Maybe in the next post.
I hope you enjoyed this post. To get to its title, what else could that refer to if not to a song’s lyrics? It’s an early one from Jethro Tull, in which then-young-and-optimist Ian Anderson gives some piece of advice:
Nothing is easy. Though time gets you worrying
my friend, it’s o.k.
Just take your life easy and stop all that hurrying,
be happy my way.
But maybe I ‘m just not that type of guy — or am I? Maybe neither Ian Anderson is that type of guy, or else he wouldn’t have written all that wonderful music of his (music is like any other business: it requires endless hours of study, trials, rehearsals and failures before even one inspired and well-performed musical phrase can come out).
Nothing is easy, then, and prototypes are not an exception. But now materials are on their way, and my motto is that getting something going is more than half of the work. In my next post I will most probably announce some details on how to order boards and kits. In the meantime, we can all rely on young Ian’s optimism. Maybe he knows better than we do.