Andrew “Bunnie” Huang is a hacker who can’t get enough of hardware. So he has published a book, dubbed The Essential Guide to Electronics in Shenzhen, that will help hardware creators and hobbyists, or makers, navigate the massive supply chain in Shenzhen, China. The book will make it easier to expand the do-it-yourself hardware movement, known as “maker,” that is gaining increasing traction around the world among tech savvy innovators.
Huang, who hacked the original Xbox and created a cool open-source (NSA proof) laptop last year, posted on his blog about his new crowdfunding campaign to publish the book. In just a day, he was able to raise $18,000, far above his goal of $10,000. That may be in part to a very nice endorsement.
Edward Snowden, the man who leaked the U.S. government’s secrets to the world, is an electronics geek. And so he tweeted that Huang’s book might be “the coolest reference book of the year” for hackers and makers.
— Edward Snowden (@Snowden) February 4, 2016
Huang bills the book as a “sourcing tool designed to help non-Mandarin speakers navigate the Hua Qiang electronics market.”
Huang has years of experience working with manufacturers in Shenzhen, and he describes the book as something “I wish I had when I first stepped foot into China a decade ago.”
“I learned about supply chains and how to mass-produce hardware. Over the years, I’ve blogged about my experiences in Shenzhen: ‘MLTalk with Joi Ito, Nadya Peek and Me’ and ‘Products over Patents’, and given tours of the markets to parties ranging from graduate students at the MIT Media Lab, to VCs and executives,” Huang wrote. “I’ve spent a lot of time on the ground in Shenzhen figuring out how to build my (often quirky) pet projects, ranging from my own version of a Shanzhai phone to a bespoke ARM-based laptop, to interactive conference badges that encourage participants to breed unique light patterns through virtual sexual reproduction.”
In particular, Huang said the Hua Qiang electronics market in Shenzhen has been an enabling resource for him, but he had to overcome the language barrier. If you need a ton of connectors and switches, Huang tells you how to get them, and he has advice about how to tell if any components are fake.
The book will be published on paper. The campaign finishes on March 18, and Huang hopes to have the final proof around March 7. The paper books could be out in June.
Opinion makers, founders, and funders often develop a consensus of opinions around specific entrepreneurial ideas and evaluate opportunities narrowly within that predefined framework. Traditional and social media can exacerbate the problem by transforming that simple consensus into a dangerously hyped consensus.
Being an original thinker and challenging the status quo are the most exciting dimensions of entrepreneurship for both founders and funders.
It is, of course, possible to be successful founders and funders by following established consensus. Some founders launch companies by analyzing existing ones, copying them, and adding operational excellence and regional expertise. In the same vein, some funders base their investment strategy on joining “party deals” and blindly follow proven investors.
That said, it is important to recognize that extraordinary, game-changing and industry-defining tech companies (i.e. Google, Facebook, Uber, AirBnB, Spotify) were not built by making operational or feature improvements to an existing idea or business. Rather, they were all non-consensus business ideas, applying brand new thinking and approaches to existing and new problems.
When those companies started, founders and a few funders had an idea that the majority of people around them didn’t share. They were clearly in the area of non-consensus. A good read on this topic is by Brian Chesky of AirBnB: 7 Rejections.
Here is a simple framework for analyzing consensus vs. non-consensus thinking:
In order to unleash entrepreneurship and take it to the next level, both founders and funders need to be able to get out of their comfort zones and push the envelope in the areas of non-consensus business building. If founders and funders rely on consensus and good execution, this may well achieve some gains and in some cases even good gains. However, you can only achieve extraordinary gains based on sustainable huge opportunities by pushing the envelope in the areas of non-consensus.
If you’re a founder or funder pursuing a non-consensus based business idea, here are three key things you need to keep in mind:
1. Accept that you’re going to feel alone
Deciding to work on a non-consensus driven business idea is often the start of a lonely road, which can be very scary and might push both founders and funders to constantly challenge their decision making.
Founders and funders need to accept that non-consensus based decisions imply by definition a sense of isolation. There will likely be a large gap between T0 (time in which the decision is made) and T1 (time in which it is possible to see the results of that decision). In a non-consensus tech venture, the time between T0 and T1 can be extremely challenging.
Tip: Once you’ve made the decision to work on a non-consensus venture, try to protect yourself from the noise of consensus. Try not to be influenced by what others say and think. This is tough because the noise can be high and can come from many directions: friends, press, other founders and funders.
This is usually the best time for founders and funders to stick together and feed off each other’s energy. This is a war against consensus, and the best thing to do is to stay super focused and hide from the hype of consensus.
2 . Challenge your own thinking — you may know too much
Sometimes knowing too much is an obstacle because knowledge aligns itself with the status quo and therefore with consensus. This is why in some cases, young founders can come up with disruptive non-consensus based business ideas. This is also true for funders, who might have previously invested in the space and are not able to recognize a new idea because their brain is influenced by their old experience.
Tip: Founders with strong experience in an industry should always be sure to challenge their own thinking. The most traditional industries can be disrupted if approached from a new angle. Sometimes we observe spectacular failures from serial entrepreneurs who just work within the constraints of what they know, unable to free themselves from the past.
Similarly, some funders should not have the answers before asking the questions. Keeping the brain fresh and unopinionated in front of a non-consensus business idea is often a key component of successful judgement.
3 . Don’t court the cool factor
Sometimes there is a perceived cool factor in developing a non-consensus business idea: “I am working on the next search engine because Google sucks! Therefore, I am building the next Google.” Non-consensus business ideas emerge because founders and funders see something other people do not see, rather than a desire to generate hype around a cool story.
Most founders and funders are not proud of the fact that their venture is a non-consensus one. They actually suffer the non-consensus dimension. It makes their life much more complex.
Tip: There is nothing cool about working on a non-consensus business idea. Avoid seeking publicity until product-market fit is proven and focus on execution. Hype is not validation.
Founders and funders need to realize that in order to build extraordinary large sustainable businesses, they need to get out of their comfort zones, take risks and found and fund non-consensus driven ventures. In Europe, where I am based, this is all the more true: European funders tend to be more focused on protecting the downside rather than helping to unleash potential of the upside, and founders are more focused on developing ventures with an exit in mind rather than focusing on the broad long term objective of maximization of shareholder value.
So, founders and funders, let’s forget the hype, the news, the political posturing and all the rest. Let’s all focus on working hard to unleash the most successful non-consensus based entrepreneurial ventures!
Roberto Bonanzinga is cofounder of InReach Ventures, a software-powered investment firm focused on the early stage European sector and based on a no-management-fee structure. He has more than 20 years of experience building technology companies in Europe and in the US. Prior to cofounding InReach Ventures, he spent eight years as a General Partner at Balderton Capital (formerly Benchmark Europe).
Join us in a city near you at Entrepreneur's Accelerate Your Business event series kicking off Feb 23. View cities and dates While some significant strides have been made by women in STEM and the startup world, there is still a ways to go toward gender parity in the industry. Silicon Valley is a stronghold of the tech industry, but it is actually Chicago and Boston that can claim the highest number of women-founded startups, according to a recent infographic presented by Coupofy.com.
A week or so ago a long-time client asked me to review an opportunity one of her business partners had sent her way. In her email she said she was excited.
Last week’s announcement from Parse that it’s shutting down its mobile backend service has left the development community perplexed about the future of this type of service. If you’ve missed the Twittersphere commentary, it’s worth the read:
From tales of developers’ depressing mobile backend-as-a-service (MBaaS) journey…
To those questioning the future of MBaaS …
To those fighting back and petitioning to keep Parse up and running …
What’s clear is that Parse isn’t the first popular backend service to shut down — StackMob, for example, was shut down in 2014 after being acquired by PayPal — and it won’t be the last. The only way developers can avoid reliving this nightmare is to make sure their backend-as-a-service vendor does not lock them in.
You should have full control over the source code of your applications and should not have to worry about what happens to your app if your vendor is acquired or decides to shut down (even Google and Microsoft shut services down).
It is imperative if you are considering using a backend (MBaaS/BaaS) vendor, that you ask the following three questions:
1. Do I have full access to the MBaaS source code?
Ask your vendor if all their source code is available to you. Not just the client-side SDKs, but also the backend server, and the backend server administrative console.
2. Can I continue to run my app if your service shuts down?
Ask your vendor if you have the ability to download the runtime components of your app backend and deploy and administer it anywhere you like without going to their web site. You should be able to stop subscribing to the vendor and still run your app as expected.
3. Do I own the intellectual property (IP) of my app components?
This issue requires both technical and contractual support. Ideally, your vendor answers yes to questions #1 and #2 above and also gives you IP ownership of the runtime components of your app backend (with the exception of any open source components, of course). This should be clearly covered in the Terms or Subscription Agreement.
Here is a simple test to check for lock-in: Ask your vendor to show you how to download the source code for your app backend, and run the server in your own infrastructure, including the backend administrative console. If they can’t show you how this is done, or refer you to a customer that has done it, you are probably locked into your vendor.
Several vendors have announced new Parse migration offerings. As you do your research, keep the above checklist of questions in mind. And if you spot any more good Parse migration tweets, send them my way.
Rich Mendis is cofounder of AnyPresence.
Amazon is making waves as usual, but this time its silence could turn out to be literally golden. The company could be readying to open up hundreds of brick and mortar stories, if you believe what General Growth Properties CEO, Sandeep Mathrani, said during his company’s earnings call this week, and the additional stores could even go beyond books. Mathrani later backtracked, but the fact that Amazon hasn’t countered the claim suggests it may indeed have big plans in place.
If Amazon is really increasing its bet on brick and mortars exponentially after its opening of a bookstore in Seattle last fall, then it must have seen a good payoff from that test store. As the site that 44% of shoppers head to before any other when considering a purchase, it wouldn’t be jumping into the brick and mortar mix for no reason.
Even if its stock dropped 10% overnight due to missed Q4 2015 expectations, Amazon is still the clear online retail winner when it comes to market share and revenue. Opening more stores would take many in the industry by surprise, as Walmart, Macy’s, and other prominent retailers permanently shut down numerous stores mere weeks ago. In this context, Amazon is catapulting its risk-taking to the next level, and this move could produce results that would appease investors. It is bucking all trends and showing that it is in a class of its own — if it pulls this off, that is.
The company has historically shrugged off criticism about its nonexistent or miniscule profits for the retail side of its business, but these stores could be a chance to increase margins quite a bit. One of the main downfalls in Amazon’s Q4 2015 results was much higher shipping overhead than expected. The company spent $1.85 billion for the quarter and over $5 billion for all of 2015 on shipping, but physical stores could cut down on that. Granted, the pilot store gives customers the option to have items sent to their home so they don’t have to carry everything out in bags, so shipping still presents a cost. But the opportunity to increase in-store sales through impulse buys and personalized, data-driven upselling could more than make up for that. Amazon has sacrificed short-term margins and built up impressive market share. Now it is in a prime position to capture the margin it has been losing out on.
And if books turn out to be the main products in the suspected stores, that’s interesting for two reasons. First, it would mean Amazon is capitalizing on its roots. Second, it would mean Amazon knows it can do what fallen book behemoths couldn’t by offering a great shopping experience on multiple channels — known as omnichannel retail. Of course, with all of its one-time competitors either out of business or much reduced, Amazon would enjoy a less competitive market. This means meeting consumers on every channel they shop on and, if speculations are correct, even shoppers outside of the Seattle area will be able to chat with employees, browse products, and try out Amazon devices soon. This might even lead to fulfilling online orders in-store, further decreasing shipping costs.
Shoppers already want access to Amazon stores. TimeTrade found last year that over 70% of shoppers would rather shop at a physical Amazon store instead of online. Why wouldn’t Amazon give shoppers what they want? Adding stores simply makes sense because it would cancel out many of the costs that have historically kept profits slim.
From fulfillment to shipping costs to returns, brick and mortar could be the answer to some of the issues that eCommerce has introduced to the retail world. John Idol, CEO of Michael Kors, said this week that “e-commerce generates a lower operating profit for us than four-wall brick-and-mortar … when the consumer requires free delivery, free return, wonderful packaging.”
Taking it a step further, a report last month from L2 found that pure play (online only) retail shops simply aren’t as successful as multichannel retailers with stores. Numerous pure play retailers have had their valuations slashed, and experimentation with pop-up shops leading to the establishment of permanent retail locations is becoming more common.
At the very least, Amazon’s stores could be a lesson to pure-play retailers that brick and mortar is a profitable endeavor. Smaller retailers, like Warby Parker, have found success with physical stores. While a large company like Amazon has a lot to lose with aggressive expansion, it also has the most to win due to its strong price perception, brand awareness, and loyalty. Maybe online stores will prove to be a gateway to brick and mortar locations.