Great article. One of the best I have read on said subject. I’ll add a few points. I have found that tooling (whether China or here) usually runs 8-12 weeks. Also, while the title references manufacturing in China I have interviewed a couple of firms in Silicon Valley where they will build the circuit boards for you stateside and outsource tooling and plastics to partners in China. Product gets assembled in the US. Not necessarily the cheapest option but allows you to deal with a stateside partner who is well versed on the ins and outs of production in China. Also potentially good for initial production runs. I like the points about making sure one has feet on the ground in China. I would simply add that a small startup should always make sure source inspection is done once your people leave. Always, always source inspect. The day you don’t source inspect is the day you have a pallet of non functioning goods sitting on your dock. Always check references of the manufacturers. Avoid factories where they refuse to put you in contact with references. I would also note that finding factories typically takes longer than 1-2 weeks. Anyway, great article. Thanks for sharing.

Rindge Leaphart


Editor’s note: Rui Ma is a partner with 500Startups based in Beijing.

I have to admit, before I decided to fly to Southern China this past week and dig deeper into the hardware ecosystem, I knew very little about anything to do with manufacturing. Sure, I looked at hardware-related investments, as every investor does these days, and tried to apply concepts of unit economics to the products, but I could not assess very intelligently whether the companies’ projections made sense, or were just a ton of acronym-filled BS.

I also struggled to know what kinds of challenging questions to ask. Especially at the seed stage, where companies are often coming to me fresh off of the success of a Kickstarter campaign and there isn’t a ton (OK, hardly any) of user data (or data of any kind) to paw through, I found myself mostly nodding in agreement with what the founders would…

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