Poor Quality Will Kill You

Author Gravatar Image MARC BARROS
"Don’t ship crappy product."

An obvious statement to the rest of the world, it’s not that simple.

Shipping a quality device is by far the hardest part of building a hardware company. I’m not even talking about the extra work it takes to deliver an amazing customer experience. I’m just referring to a product that doesn’t break, feels great when you use it, and delivers on the promise. Not just once either, but multiple times over, across thousands of units.

So as a hardware startup, how do you ensure you deliver a quality product?

Understand The Financial Impact

Assuming you retail your product at $100 and it costs you $50 to deliver the finished product to your customer, you have $50 in profit.

Each time you deal with a defective unit it costs about $15 in shipping (to and from the customer), requires you to replace the defective product with a new unit from your warehouse that you can no longer sell, and spend about $5 to ship it back to the factory in buik. Even though your factory says they will reimburse the costs, it will take 60-90 days from the time you send the product back to agreeing on the root cause and in turn the financial reimbursement. In the meantime you are wasting your limited inventory and cash reserves replacing defective units.

On top of that you drop to a 3 star product on amazon, which means you sell less units, lowering your overall profitability.

Here is what the math looks like...

Nail the Basic Experience

In a rush to build the next amazing product, a lot of startups develop right past the features they have to be great at. Always wanting to do “the new thing” it is incredibly hard to keep a team focused on delivering less features, at really really high quality. Because to do this, you have to work on the same few features over and over and over.

Nail the basic features and you will have a solid product. Miss them and customers will punish you.

At Contour we realized we had to be really great at capturing action video, which meant it had to be rugged, easy to use, produce amazing video, and be mountable on a variety of locations. Often trying to push the envelope, our customers made it clear when they felt we missed these basic features or half delivered on what we promised. Blinded by the technology arms race, it was hard to just focus on the basics when we wanted the product to do so much more.

Although your scaled back features won’t impress the media, your customers will reward you with much higher reviews. A result that Amazon can prove drives higher sales.

I wish I had done this more.

Work With Production Engineers Early

The moment you begin to design your product, you should be working with a production engineer. An under appreciated expert, their years of producing high volume product, can save you thousands of dollars down the road.

If not, you will get to the end, hand the factory your beautiful design and realize it can’t be made. It’s not that it’s impossible, it just means that with a yield rate of 80% they are not willing to make your product. The 20% loss is not something you or the factory can afford to cover.

So what happens if you design a product that can’t be reliably produced?

They start changing your beautiful design, turning your elegant product into a frankenstein pile of plastic. Or even worse, you have to start over because you forgot to ask someone if what you are designing can even be built.

The first VholdR camera was a beautiful design. So beautiful it couldn’t really be produced.

Constantly Be Checking Quality

Quality isn’t a job title or a single department in a startup. No doubt you should absolutely have people who are 100% focused on testing, but as a startup it takes the whole organization to help deliver a quality product. Always understaffed you need all the help you can get to test the product, document the issues, and fix them. Although you hope a 'quality process' will help you find a lot of bugs, most of them are found by accident, using the product in random ways.

Shifting the company’s mentality from expecting the product to be flawless to expecting to find mistake, is a small step you can make to keep everyone focused on constantly checking for issues. Assuming someone else on the team will find the bug is a fast way to a massive defective rate.

Even without the expertise in house, you can hire great third party companies who will work with your supplier on their quality process, evaluate their test fixtures, and sample units as they come off the production line. Most frustrating of all, is just because a bug didn’t exist before, doesn’t mean it won’t magically appear down the road. A slight change in production process or parts ordered can turn into a massive problem that isn’t caught until you have thousands of units sitting in your warehouse.

Have Amazing Customer Service

Every company should have fantastic customer service. But if you don’t, it will become very apparent when your product sucks. Read any Amazon review and you can see the customer process goes like this.
  • The customer buys the product, uses it, and breaks it.
  • The customer calls the retailer who tells them to call the company.
  • The customer calls the company and unloads on the first person who answers the phone. Or if no one answers the phone they unload on every voicemail they can reach and every email address provided on your website. Continuing to rant on every forum and in the comments on every article about your company, until you address their issue.
  • After a few exchanges the company sends a replacement unit.
  • This process repeats until either the product works or the customer gets so fed up they return the fifth replacement to the retailer.
  • The customer then gives you a 1 star review online and tells the world how broken your product and customer service are.
You will produce poor quality product along the way. Regardless of the process, you will have customers who unfortunately get their hands on a defective unit. An angering experience, how you handle the issue will speak louder about your company than the broken device in their hand.

Faulty product is understandable, crappy customer service is not.

Conclusion

It’s easy to critique a hardware startup from the sideline. Expecting every device to be Applesque in quality, most people don’t understand how a massive number of defective units could have ever made it into customer’s hands.

Unfortunately the ticking clock and draining bank account force these startups to make decisions they would never want to admit. Ship or go bankrupt, every hardware startup finds itself at a quality crossroads.

A crossroads that can be mitigated with advanced planning, you eventually realize that producing quality product is the heartbeat of your company. And just because you make it to billions in sales and millions in capital raised, doesn't mean you are immune from this constant battle. The bigger you get, the more expensive the mistakes become.
Last updated on 2014-04-05 at 05.12.50 PM Published on 2013-10-15 at 01.31.48 AM