So it’s been a while since I’ve posted anything.  In addition to a number of small personal obligations I’ve had over the past few weeks, I’ve also been spending a lot of time shipping out QR clocks to my customers and handling customer service requests.  I’ve been really eager to post a final summary of the whole QR clock experiment, but I had to wait for the experiment to end first.

Now that all of my clocks are happily in the hands of their new owners, I can.

Planning

The QR clocks were never intended to be a get rich quick scheme.  The theme of my blog has always been “make an educated guess, try it, and learn from your mistakes”. I’ve been curious about things like ordering from Alibaba and getting PCBs assembled for a while now, but the requisite minimum order quantities have prevented me from trying any of these things.  I try not to be too shrewd with money when it comes to a learning opportunity, but I really couldn’t justify dropping the coin required to make 50 of something if I wasn’t going to be able to sell them later to at least cover costs.

Fortunately, Tindie offered just the thing I needed.  If I could get 50 or so pre-orders for a product, I would have at least that many guaranteed sales when I finished my little experiment.

Originally, I was planning to start with the Ice Breaker as it’s a fairly low cost device and would offer the least amount of risk on my part, but the QR clock was a much more popular gadget, and I already had a few emails in my inbox asking to purchase one.

Pricing

My other posts detailed the process of designing and constructing the prototypes, but when I was done with all of that, I estimated that the clocks would cost about 50, but that was looking impossible.

Given that I was doing a fundraiser through Tindie, I only really had one shot at getting it right.  Tindie provides two weeks to reach your pre-order goal, and I was only going to be able to go viral once.  If the clock didn’t get to 50 orders, I simply wasn’t going to be able to make it happen.  Then again, not making it happen wasn’t really the end of the world.

I decided that failing to reach my goal and cutting my losses was preferable to working hard to make it happen and losing money due to the low price, so I bit my lip and set the price to 100 was well beyond what I was originally hoping to charge, but I anticipated a bunch of unexpected expenditures along the way.

I was right.

Fundraiser

The Tindie fundraiser went really well.  On my last day, I reached 45 pre-orders and decided that it was close enough to 50 to go ahead and move forward.  I lowered my goal to 45 and magically reached my goal.  Now I just had to build them.

Original Sales

What follows is a summary of all of the things I ran into along the way of developing, manufacturing, and selling the QR clock.  I thought it’d be fun to start this summary in the black and slowly work my way down to the red.  Let’s see how low we can take this.

Tindie Money: +4403.25

Total: 4403.25

One thing that I somehow failed to acknowledge when starting this project is that Tindie charges a percentage for their services.  Fortunately, they get around the PayPal transaction fees by bundling payments together, but their services aren’t free.  Selling 45 clocks for 4500+shipping.

A Shipping Mishap

The Tindie interface is a little strange, and you have to decide on a shipping amount for each individual country you ship to.  I ran some quick numbers and settled on 25 for all international shipments.

Somewhere along this process, I screwed up a bit and somehow set my shipping rate for Canada, Australia, and Switzerland to 600.

Extra Sales: +642.66

Total: 5049.63

Prototype Development

Alright, that’s enough earnings for now.  Let’s take a good chunk out of that.

When I first started doing the math for the QR clock, I was only considering profit made on the individual unit sales.  It was only after I started running the numbers that I thought it’d be a cool idea to try to make back the development costs as well.  If I could manage to cover the costs of the original QR clock prototype, it would be the first time in Ch00ftech history that I didn’t lose money on a project.

Of course, people always ask me things like “wow, how long did it take you to make this?” or “How much money did you waste spend trying to synchronize your windshield wipers to music?” I’ve always made a point out of not tallying up these numbers. I consider my hobby fun, and it can’t be a debilitating addiction if I don’t know how much it’s costing me!

Anywho, once I added up the PCBs, the components, and the LED modules that I ordered off Adafruit, the total came to a little over 50 donation to Hurricane Sandy relief (what is it about Australian people that makes them so nice?).

V2 Prototype

The original QR clock was built just to see if I could do it.  I had no idea if it would be possible to get an AVR to generate QR codes and display them like that.  Because of this, my normal project thriftiness was present.

It was only after I decided that I was going to make and sell them that I really unkinked the money hose.

I ordered LED display samples from two different vendors on Alibaba as well as some from Futurlec:

I also ordered five PCBs and enough parts off Digikey to stuff all five.  I always order extra parts in case there are any issues.  The plan here was to assemble one clock and if all went well stuff the other four by hand to add to the 50 or so I ended up ordering.  Though a little tedious, this would cut down on some of my wasted components.

The original QR clock used a 3.5mm barrel DC jack.  It turns out that this type of DC supply is very rare for 5V applications, so I was looking for a good vendor that sold 5V DC barrel jack supplies with cables long enough to mount on a wall.  I ordered a few off Amazon for about 10 cheaper than what I was charging.

I also picked up a pack of shipping labels.  They only worked for domestic shipments, but they added a little bonus professional look to the final product.

Labels: -14.56

Shipping: -521.57

Total: 473.03

Counting Eggs

So where does this all leave me?  I’m still 4,400 Tindie sent my way was for three fewer clocks than anticipated.  So that makes my current inventory:

Original Shipment: +55

Tindie Sales: -42

Extra Sales: -6

Kits: -3

Clocks Left Over: 4

Of these four clocks, two have minor cosmetic defects. On top of that, I also have a bunch of left over displays and V2 prototype PCBs.

So at this point, it would appear as though I’m all done!  I’m still up over 380 in the title of this post is from an addition error that I missed before publication.

This may not seem like a whole lot, but keep in mind that it’s cut into my small supply of extra clocks. While it only cost me 200 in potential future sales.

My plan is to sell the damaged clocks at a steep discount (figure that they can be repaired to some degree by an avid hobbyist, and it’s better than throwing them away), so they’re not completely sunk (email me if you’re interested).

What Didn’t I count?

Solder

It might seem inconsequential because so little is used at a time, but when you do 6480+ solder joints, you burn through at least a few dollars worth of solder.

Tools

For the same reason, my soldering iron pretty much needs a new tip by now, and my angle cutters now get jammed up every time I use them and probably need to be replaced.

Government/legal stuff

I still haven’t talked to my accountant about this, but once I look into it, I’m willing to bet that I owe someone a cut of the profit I’ve made.  I’m really hoping that the small scale of this project will let me fly under the radar, but I’m not going to count on it.

If the project were bigger though, I’d probably have to get some kind of safety certification before selling them in a real store.  UL listing isn’t cheap.

Time

This one gets a special heading because it’s so important.

Because this project was a such a great learning experience for me, I considered my time as valueless.  With the exception of the LED soldering step, I never kept a good time log, but I can make some approximations to give you an idea:

Original QR code research/software: 20hrs

Designing circuit: 8hrs

Laying out V1 prototype: 15hrs

V1 Prototype assembly: 2hrs

QR clock Prototype firmware: 25hrs

Shopping for parts: 6hrs

Laying out V2 prototype: 15hrs

V2 prototype assembly: 2hrs

V2 Prototype firmware: 8hrs

Production firmware (optimization): 20hrs

Promotion (video, etc): 8hrs

Attaching rubber feet to clocks: 1hr (with help of friend)

Soldering LED modules: 25hrs

Repairing defective boards: 3hrs

Packing and shipping clocks: 3hrs

Sum: 161hrs

 This is probably a very conservative estimate.  It’s hard to judge how long things in the past took me, because I tend to estimate how long it would take me to do now which would obviously be much less thanks to all that I’ve learned.

I also have a number of different circuit layouts that I started to work on while I was considering other LED display options that never made it into the final version such as the 3D model I built of the home brew LED display that I never used.

So when you work out the math, I earned approximately:

100.  In reality, had I charged 2500 on the deal.

I guess the tendency when creating a product like this is to compare it with the price of other products on the market.  What I should have realized is that the market for a specialized device like this is much smaller, so the startup costs associated with smaller quantities have to get passed on to the consumer.

Regardless, if a product does take off, retailers are going to want bulk discounts, and you can’t afford for those discounts to cut into your bottom line.

Expect to spend a lot of time on the boring things

While I’m glad that this project turned out as well as it did, I really think I could have done a much better job if I just had more time.  The promotional video and viral campaign that I ran I felt were rushed, and they could have been a lot more attractive and entertaining if I had only spent more time on them.

I work full time as an engineer on top of writing this blog, and I often found myself coming home from work to pull an extra eight hour shift for this project.

Also things like packing and shipping clocks took a lot of time, and I was so eager to get this whole thing off my desk that I ended up making a few errors with labels (that I fortunately caught before shipping) and had to wait almost a month to get a refund for the trashed labels.

Turns out Switzerland and Swaziland are like two totally different places.

Trust no-one

Never count on a supplier to deliver what they promise.  Sometimes mistakes happen, and other times, people are just out to screw you.  Always have a back up plan in case of a major screw up somewhere outside of your control.

Put on your tinfoil cap and be skeptical of everything.  Just because something looks right doesn’t mean it works right.  Foreign manufacturers know this and will often try to paint over their mistakes and hope nobody notices.

Pay yourself first

If you actually want to supplement your income with a project like this, make sure you bill yourself at a fair hourly rate.  Even something like 380, I would like to put it towards some kind of scholarship.  Just something small to cover textbooks for engineering students.  This is all up in the air at the moment, but if you have any tips regarding organizing a scholarship, let me know.

While this experiment was definitely a success, I’m not sure if I’m going to do one like it again soon.  I’m an engineer, not a businessman, and I found myself often frustrated and bored with the challenges I was presented.  I’m glad that I gained a lot of useful knowledge that will certainly help me out in the future, but I definitely don’t need to turn every project into a product.

Furthermore, I’ve published plenty of half-finished or partially-working projects on my blog in the past, and I feel like the thought of potentially selling some of my future work is preventing me from publishing some of my projects which are good enough for a blog-post, but not polished enough to drum up excitement about another fundraiser.

I think for the next few big projects, I’m going to go the art route.  Rather than worrying about making a project into a commodity, I’m going to worry instead about making it cool.  I saw a painting of Spiderman in an art shop today on sale for 380 off the prototype alone by selling it to some nutty art collector.

Would have saved myself a lot of effort.

#qrclock @ch00ftech it finally arrived!! So happy! pic.twitter.com/DGZOQyaVth

— Sam Redfern (@sredfern) May 20, 2013

Wee just received my QR Clock from @ch00ftech twitter.com/onkelcommy/sta…

— Brian Fløe (@onkelcommy) May 7, 2013

Thanks @ch00ftech for this super awesome QR clock! twitter.com/femtoduino/sta…

— Femtoduino (@femtoduino) May 4, 2013

 

exited that my QR clock from @ch00ftech dame today

— Brian R. Stuckey (@brianstuckey) May 3, 2013

@ch00ftech Got mine ^^ tinyurl.com/onbyngu I made a patch to fixwarnings + add 24h display support if u want it: p.theglu.org/630

— FireGPG (@firegpg) May 27, 2013

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It’s so cool.

Worked out of the box. I will probably hack it for fun.

Thanks for taking the care to build such a quality product.

Best,
Pat

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All is well in Kent with the amber version working great!
Thanks!
Jim

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