How not to fuck up your manufacturing startup
Interesting post by Johnny Bowman:
This post is meant to share the lessons I’ve learned in a manufacturing startup. It’s intended audience are people who are working on a manufacturing startup idea, are familiar with the tech startup scene, but don’t have a ton of experience in the manufacturing sector. And by “manufacturing startup idea”, I mean you’ll be operating in a warehouse or factory setting. This is not about having a formula or design for a copacker, 3d printer, or artisans in Italy — ya’ll got different issues.
I work as the CFO/COO of Edenworks, an indoor farming startup in Brooklyn. Given our job is to design and operate farms inside warehouses to produce salad greens as efficiently as possible, our issues are more manufacturing than farm related. Most of the conventional startup wisdom out there doesn’t apply to us or other manufacturing startups. So given these lessons were all learned the hard way, I figured I’d share them to spare some sweat.
Process, not features, are your competitive advantage. This has been the biggest learning for me. Most startups focus on features to gain customers. Manufacturing startups largely don’t because features are easy to copy, and second movers often have the advantage if they can produce your feature for cheaper. Consequently, most manufacturers stay ahead in their industry by having the highest level of productivity, and that means focusing on process. This is what frustrates guys like Peter Thiel about manufacturing. He wanted flying cars, but instead got 40 years of relentless process innovation to drive down costs. The undisputed leader of this drive has been Toyota. As a result, Toyota is worth is $186 billion, 2.5x more than the second place finisher, Daimler.
Focus on physics before software. . . .
And let me again recommend W. Edwards Deming’s wonderful and highly readable book, Out of the Crisis.