Archive for January, 2012

Update #7: Happy New Year! (Western and Chinese!)

Hi Folks,

Things have been cranking along here in the High Roller Labs, and while January is usually a notoriously slow month, this year it’s gone by blindingly fast with tons of work being done in the background.

First, let me wish you a Happy Chinese New Year! Did you know that yesterday was the start of the Chinese New Year? Either did we until recently. This is one of the things you find out when you’re working with Taiwanese partners and they mention that they’re taking 10 days off for New Years. Turns out ALL of the Chinese and Taiwanese do this and go back to their home towns for New Years. Evidently it is the largest annual human migration on Earth. The upshot is that the whole country shuts down.

Luckily we were able to make great progress with our manufacturer before the holiday and we’ll be able to use this time to refine our design and processes.

If you’re wondering why we’re using manufacturers in Taiwan you can check out the explanation in the blog on the main site.

Here’ a summary of what we’ve been up to:

Done:

  • Established a solid relationship with a new manufacturing agent in Taiwan. (After a year of work together, our first agent opted not to continue with the project, leaving us in the lurch. Starting over with our new agent, the relationship is everything the first one should have been.)
  • First round of quotes were received and reviewed.
  • Spun off High Roller USA LLC as a real live manufacturing company. This has tax and insurance benefits.
  • 3D models are complete which are then made into manufacturing drawings, and can be modified rapidly.

Next Steps:

  • Clarify specs, materials, dimensions and tolerances 100%
  • Kickoff the tooling manufacturing (all the molds, jigs, stamps, and bending forms that will make the frames and wheels).
  • Get 1st manufacturing sample made and shipped over for review.
  • After changes are made (and there will be changes/improvements/etc.) produce the 2nd sample. This should be the “Golden Sample” that all the final production models will be compared against.
  • Once approved, we’re go for full manufacturing.

If all goes well, we should see first deliveries about May-June. When people say things like “if all goes well” or “in a perfect world…” or “best case scenario” it means they’re about to launch themselves into an endeavor with a great amount of optimism and only about 80% of the information they need. Fact is, this is a development and manufacturing project with associated risk. If all doesn’t go exactly well, we’ll roll with the punches and take care of the issues as fast as humanly possible, keeping you informed every step of the way. Here’s a sobering account of what can happen during manufacturing by the creators of the Pen Type-A. It’s a great but harrowing story of expectations, cultural oddities, communication, and unrelenting dedication to exceptional results. All that being said, rest assured we are 100% committed to completion and any other result is unacceptable.

Rewards:

In the frenzy of the last couple months in trying to get the manufacturing on rails I failed to get your thank you gifts out in December. Fear not, we’ve got our graphics ready to go and shirt and jacket orders are imminent.

Women's High Roller T-Shirt

Women’s High Roller T-Shirt

Men's High Roller T-Shirt

Men’s High Roller T-Shirt

Additionally:

Here’s things we still have to do that you may not really care about but will take up a big portion of our brain time:

  • What is a 1099-K? Work with CPA to determine tax liability of Kickstarter funds. (All this is so new, it’s the wild frontier out there)
  • Create manufacturing budget and forecast.
  • Arrange final packaging and boxing requirements.
  • Get UPC codes.
  • Determine proper Harmonized System codes for import duties.
  • Arrange freight, import and customs clearance.
  • Establish a warehouse location that can do final kitting/assembly and order fulfillment.

As always, if you have any questions feel free to drop me a line.

THANKS,

Matt

Domestic Manufacturing and Manufacturing Overseas

A few weeks ago, we received an email from a potential yet undecided customer:

“I was really excited to find this. I’ve been wanting to buy something like the High Roller for a long time. But I’m very disappointed that they are not being manufactured here in the USA.
I’m sure almost all the Kickstarter funding was by people here in the US. There is nothing on this trike that cant be made right here and made better. I’m sure it all comes down to profit like everything else. This is a whole bringing back of childhood memories and times that seemed a lot better than now. I don’t remember those times being made in China. I would really like to get one of these. But I think I’ll have to pass.”

We’ve got a lot of passion about this and have considered a lot of alternatives so here is my response. It’s worth noting that after this we got a solid paying customer.

Hi!

Thanks for dropping us a line. I share your concern about being manufactured in the USA. I looked long and hard for a way to make this stateside, but came up short on several fronts. First was the manufacturing. The metal fabrication house I had do my prototypes was very interested in making the full production run for us, but their cost for just the frame was the same as the quotes I was getting for the entire product. As the owner put it, “Problem is, we’re a bunch of white guys with 401K’s.”

I then even looked for a domestic bicycle assembler, thinking that even if I had to import the components we could get is assembled here. Hunting through all the industry associations it appears that the last domestic bicycle assembler was in California and closed down around 2000.

I then tried to even keep it within NAFTA and tried to source bicycle manufacturing in Mexico. After several discussions with Mexican bicycle shop owners their consensus was there wasn’t any good bike manufacturing to be had in Mexico either.

The problem isn’t that there’s not any bike or component manufacturing in the US, it’s just that it’s very high end. I agree with your “made here and made better.” The US has got the brains for design, but we don’t have enough manufacturing anymore, everything would have to be hand crafted. We could get titanium frames right here in Colorado, as well as handmade cranks, brakes and other components, but the costs would be astronomical. I had a similar discussion with retired UAW worker who’s stated mantra to me was, “Live better, buy union-made.” (I think the premise was that the union provides great wages and therefore a great quality of life for its workers. But those wages come from somewhere.) He looked at the High Roller prototype and proudly stated, “We could make that for a thousand bucks.” For starters, that means I’d have to raise over $300,000 just to get the first production run started. Well doing some simple math, at $1000 cost I’d have to wholesale it for about $2500, then the retailers would keystone it and sell it for $5000. In a nutshell, I’d never sell a single High Roller, my investors would want their $300K back, I’d be homeless and none of the union workers would have a job either.

But here’s what has happened: Taiwan has established itself over the last decade as the premier bicycle manufacturer in the world. From automation, to design, to materials, they’ve invested heavily. The best bikes used to come from England, then Italy, then Japan, and now its Taiwan. And because of their advances, it’s become affordable for startups like us to come in with an idea and actually get it produced.

All that being said, we consider this “Phase 1.” Once we’re established and have reduced the risk, we’re hoping that some domestic manufacturing will step forward and want to help us out. Trust me, it would certainly make things easier.

I appreciate your comments and it’s got me thinking about ways we could nudge this in the direction we both want.

Thanks!
Matt Armbruster
Designer, CEO

http://www.HighRollerUSA.com

888-252-6379 v/f

“It’s never too late for a happy childhood!”