The electronic start-up’s shark fin dilemma

28th June 2019
Posted By : Anna Flockett
The electronic start-up’s shark fin dilemma

There has been a sea-change in electronic manufacturing markets. And conditions are now ideal for disruptive start-ups looking to achieve volume at a pace never before possible. Here, John Johnston, NPI Director of Chemigraphic discusses how your EMS can help you manage rapid growth effectively.

The ponderous adoption that classified the sector until the mid-80s has been replaced by a vertiginous adoption model that graphically resembles a cliff rather than a slowly sloping mound.

These two adoption models are usually characterised as the ‘shark fin’ and the ‘whale’ model and are represented below.

Innovative new products used to be adopted in small numbers by ‘innovators’ and ‘early adopters’, before gaining mass traction with the ‘early and late majority’.

The slower awareness of the ‘laggards’ helped extend the product’s life cycle. In recent years this has all changed.

The rise of disruptive start-ups in the electronics sector has benefitted from a tightly compressed adoption curve that features just two groups of consumers, usually referred to as ‘trial users’ and, rather prosaically, ‘everybody else’.

We’ll look briefly at why this compression has happened – and then we’ll explore what the potential for sudden, rapid growth of an electronic product’s market means for start-ups next.

Why the shark’s fin is making waves
Digital disruption lies behind the compressed adoption model that now characterises electronic products.

In essence, the proliferation of devices and the potential for information to disseminate through many (digital) channels rapidly is what has created a pattern for growth and product adoption that allows new products to rise rapidly from conception and gain high-speed traction.

  1. Customers become quickly aware of new products on the market through information available on the internet and social media.
  2. Digital marketing allows companies to achieve a lower cost of acquisition and a greater precision in targeting.
  3. Trends and new products spread rapidly and virally.
  4. But electronic products and platforms also become quickly obsolete.
  5. Continued competitive improvements in efficiency, price, performance or size, have led to a shorter cycle by which new versions and innovations replace products.
  6. Consumers are just as quick to replace products as they are to adopt them.
  7. To maintain market position, start-ups will need to launch other new, innovative products to create their shark fin growth again.

What shark fin growth means for electronic start-ups
The problem facing many ambitious start-ups looking to demonstrate rapid growth potential is that they struggle to marry great ideas, fantastic products, buy-in from investors and a surfeit of ambition with what is really needed to succeed at scale.

The missing ingredients are commonly the following: experience of volume manufacturing and finely-honed supply chain management expertise. Without these elements, the wheels can start to fall off even the most carefully planned rapid market penetration.

What’s more, it’s not something that can be bolted on at a later stage. Considerations such as Design for Manufacture (DfM) need to be factored into plans at the earliest time possible.

This is why, at Chemigraphic, our customer base is expanding almost as fast as that shark fin emerging from the choppy waters of rapid adoption. More and more start-ups are realising just how essential an EMS partner is in avoiding expensive redesign and re-engineering costs mounting up or obsolescence preventing those viral products flying off the ramp.

Let’s look at how early engagement with your EMS can help you manage rapid growth effectively.

Early engagement with your EMS partner
It is in the early engagement that you can ensure all those potentially costly creases are removed. And cost is not the only issue here: in a market that is rapidly changing being able to get your product to market as quickly as possible – and continue to supply it to meet vertiginous growth in demand – is essential. As is reducing risk- if the stakes are high, development costs need to be recouped and competitor products are emerging, you need a reliable partner committed to keeping you project on track and ahead of the market.

Yet, often start-ups underestimate the complexity of manufacturing. It is assumed that a product that works will work just as well when produced at scale. And is the “design package”, including all the drawings, circuit diagrams and specifications 100% complete? Has every specification been fully defined, quantified and made entirely clear? If not, the risk of unexpected misunderstandings and disruptions remain.

But this is rarely the case.

Unless your product is designed for manufacturing and for continuous volume production it runs many risks, including:

  • Low yield rate when production is scaled up to volume
  • Unforeseen problems in achieving fully compliant products on an assembly line
  • Unnecessary expenses caused by  sub-optimal design
  • Non-sustainable supply chain failures that cause delays further down the lifecycle due to obsolescence

Mass production needs expert managing: it is within the complex interplay of software, electronic design, mechanic design, components, manufacturing efficiency, yield rate, major vendor support and testing that the perfect mix can be found.

And, without an EMS partner well-versed in understanding how to align the requirements, delays are almost inevitable.

A CNN investigation found the 84% of the top-funded tech and electronic Kickstarter projects ended up missing their promised launch date.

The critical point here is that your EMS partner must be there to offer more than manufacturing. They are there for design, smart sourcing, ensuring careful governance and management throughout the supply chain and making sure this all translates cost-effectively and efficiently into the volume manufacture of your product.

Without this shark fin projects will not sleekly emerge from the waters but appear thin, fragile and liable to snap at any point.


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