Pixeom Is An Anti-Corporate Cloud Device That Wants To Give You Back Your Data Privacy

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Meet Pixeom, a prototype device being Kickstarted by brother and sister duo Karishma and Sam Nagar, with the aim of offering alternative cloud services that don’t require you to hand over the keys to your private data in exchange for a convenient digital service.  

Prior to Edward Snowden’s revelations about the NSA‘s (and other governments’ security agencies‘) dragnet surveillance of everyone’s online lives, Pixeom would probably have sunk without a trace. Or not even been conceived of as a mainstream project at all.

But, post-Snowden, there’s a perfect storm of cloud-computing concerns amassing to undermine the convenience of mainstream online services. And, after a month seeking crowdfunding on Kickstarter, Pixeom has passed its funding target of $50,000 — with close to 400 backers, and still has 15 days left to run on its campaign.

In addition to the funds it’s currently raising on Kickstarter, Pixeom has also secured more than $500,000 in private funding to get this personal cloud device to market.

It’s clear that Snowden has shone a light on something very rotten lurking at the core of mainstream cloud services. Sure, web mail clients are handy — and you get a chunk of free storage — but you’re also effectively handing the keys to your inbox over to the NSA (et al) should they happen to feel like dipping into your personal correspondence one lunchtime or other.

And of course it’s a given that your personal data will be mined by the service provider; it’s a free service, so your privacy is the product. This general snooping on/data-mining of users is a routine business model for the majority of free cloud-based services and apps.

Multiple big name tech giants have built hugely lucrative businesses off of selling your likes and dislikes to advertisers in exchange for furnishing you with a platform where you can share that data in the first place. Or store the personal stuff they need to peek at to gather sellable intel on you.

Plus there’s also the sloppy security of (certain) startups that leak your personal info all over the Internets just because they’re more interested in expanding their user-base than expending effort on adequate security measures.

So it goes.

Or so it has, but — whipped up by the storm of snooping revelations — some counter-currents are (finally) emerging to challenge the accepted wisdom that accessing the convenience of cloud services necessitates giving up your personal data and abandoning any shred of privacy in the process.

Projects like Blackphone or the Dark Mail Alliance. And now Pixeom. Pixeom’s makers say they want to facilitate a new type of data exchange for Internet users which is hosted on an anti-corporate cloud that sits in your own home — i.e. not somewhere in a vast datacenter in California where giant branded spiders can crawl all over it.

One half of the Pixeom founder team, Sam Nagar, who previously worked as a software engineer at Microsoft in Mountain View, describes the device as follows:

In a nutshell: 
1. All of your cloud services in a box for a small one-time cost, we are a combination of Dropbox/Box/Facebook/Shopify with a focus on privacy. 

2. Scalable device that continues to grow as one large storage pool instead of multiple “islands” of user data.

3. An optional exchange network that anyone can browse full of public content from people’s devices that can one day rival the large datacenter based public networks.

What exactly is Pixeom? It’s a personal, encrypted cloud device that plugs into your home Internet via Ethernet and provides cloud storage for your digital content without having to go through any third party intermediaries, and with support for unlimited expansion of said storage — either by chaining together multiple Pixeoms, or by plugging in additional USB hard drives.

The device is not just focused on storage though. The Pixeom platform also offers alternative cloud apps to replace online services — name-checking the likes of Dropbox, Box, Google Drive, Microsoft Sharepoint, Facebook and Amazon as services it wants to offer an alternative to — in a simpler (and potentially cheaper) way than by having to set up a NAS box or host your own server.

The three apps that will be included with Pixeom at launch are called File Exchange; Club Exchange; and Market Exchange — and they support, respectively, file-sharing & document back-up, collaboration & syncing across multiple devices; discussion boards for secure communication and digital socialising; and an interactive storefront for buying and selling, with Dwolla payment processing built-in.

Or, in other words, alternatives to stuff like Google Docs, Dropbox, Facebook, and Amazon Marketplace.

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There are also no subscription fees for using Pixeom or its apps. The business model relies solely on selling the hardware itself — at least for now. Sam Nagar tells TechCrunch that it may look for additional revenues streams in future.

“While we will make more than enough money off the sales of our devices to support ourselves (we are a very lean startup with high profit margins), we will later consider monetizing off of the Pixeom Exchange Network in more non-traditional ways,” he says.

“One of our ideas is if a device owner wanted their content to be discovered more easily, they can pay to have it show up higher on the listings, similar to how Google does it with their search engine, or how Facebook allows you to ‘sponsor’ a post.”

The Pixeom device is powered by a Raspberry Pi microcomputer — making it low power and helping to keep the cost down (early bird Kickstarter pledges for a $100 Pixeom are all gone but you can bag the device for $125). Each Pixeom has 16GB of internal storage, expandable via two USB ports to plug in your own hard drives.

Pixeom users can also choose for their device to stay private or invite trusted friends to collaborate within the secure network. There’s also an option to join a global network of Pixeom devices so that public content can be shared/advertised within that wider network.

The collaborative core of Pixeom’s platform means that a Pixeom owner can share content with anyone else (provided they have the ability to access a webpage). There’s no requirement for the content viewer to purchase Pixeom hardware or download their application, although there is a free mobile app for accessing the Pixeom Exchange Network of public content, as an alternative and richer point of entry to accessing this content via a web browser.

“The only time someone else needs to buy a Pixeom device is if they want to have their own private area that no one else can see, or if they want to start publishing their own public content on the Pixeom Exchange Network. Otherwise, a team of 25-100 people can all easily share and collaborate on one single device using their web browser,” adds Sam Nagar.

If all goes to plan Pixeom’s founders are aiming to ship to backers in May.  You can see the pair’s full Kickstarter pitch in the below video. 

How many Pixeom’s do the founders reckon they can ship in the first year? “We project selling 400,000 – 500,000 units worldwide,” says Sam Nagar. “We are currently lining up channel partners and finalizing the designs for more types of hardware that our stack can run on which will appeal to a variety of users, and after talking with many of them as well as from our own research, we feel this is a fair estimate.”

The startup also has plans to expand the apps it offers in future — with cloud games one area it’s already working on — starting with “something like a trivia game or a more traditional one like chess/checkers”.

“People could have private games with each other, or match up with each other on the exchange network, all hosted on their devices. Their scores could be published and we could even give away benefits to the top public score of the day like promoting their content within the network. We want to be regularly involved with our user base and will continue to see how we can make using Pixeom regularly to become a fulfilling experience,” adds Nagar. 

It’s also working on con conferencing and telepresence apps, everything from voice to screen sharing, he adds.

 

The FAA Shuts Down Beer-Delivery Drone

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Ice fishermen on Lake Waconia in Minnesota were pleasantly surprised when a Wisconsin brewery, Lakemaid, flew a twelve-pack of their frothy suds over the icy wastes to their warm fishing cabins using a hefty, remote-controlled quadcopter. It was a match made in zero-degree weather: the brewery took orders and flew their drones out to the fishermen who, in turn, didn’t have to trudge to the shore for liquid refreshment. The FAA, however, didn’t find the arrangement so appealing.

According to FAA rules, you cannot fly a drone for commercial purposes or above 400 feet in the United States. Therefore a robot flying a sixer over to some thirsty pescatarians is right out. One phone call from the FAA shut down the entire operation and, in turn, set off an Internet firestorm. But the company, whose logo is a fulsome lake maiden with a slippery tail, will not be grounded for long.

“The model of UAV used for the video was a DJI F550,” said Lakemaid president Jack Supple. “There was a little wind that day so it was laboring to lift the twelve pack. We had to lighten its load by some bottles to safely fly it. We were about to order a larger drone when the FAA called. So we’re waiting to see where this goes. Regulations come out in 2015 and we’ll be ready.”

The company even began a petition on Whitehouse.gov to get their beer drones (BUAVs) back in the air and has definitely caused a social media ruckus on Twitter and Facebook. Their website still features a 2011 retail list but has been revamped to focus primarily on their flying robokegerator.

Savvy students of marketing will note that this move is an excellent PR stunt for the small Stevens Point, Wisconsin brewery, although there is some disappointment that the FAA spoiled the fun. Over Super Bowl Weekend the “fishermen [were] going to sit there from Friday 5 p.m. all the way through Sunday,” said Supple to the AP.

Want to try Lakemaid? Supple says you’ll have to wait (or order a sixer online). The drones probably won’t make it to the coasts just yet. “The only way to get it in New York and San Francisco would be to know a real nice relative traveling from the Upper Midwest, or to call a shipping retailer in one of those states.”

I asked Supple what was next for Lakemaid. Rockets perhaps? He balked at the question.

“We never even considered using rockets. Lakemaid Beer Frosty Winter Lager is far too good to risk on a violent rocket ride and crash landing on a frozen lake surface. The ability of the UAV to set the twelve pack gently and tenderly down in the snow next to the fish house make us fans of this form of delivery,” he said.

Apple’s CDN Plans Would Give It Greater Control Over Streaming For Expanded Offerings

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Apple is said to be working on a content delivery network (CDN) all its own, according to new information reported last night by the Wall Street Journal. Cupertino wants to build a large network capable of driving more data to its customers, for the purposes of providing improved streaming offerings for its television products.

Apple is making its way down a path that has already been walked by other major Internet content players including Google, Facebook and Netflix, each of which has invested heavily in network infrastructure in order to support the vast amount of media being streamed via their online portals and products.

The WSJ report also notes that building its own CDN will help Apple manage its growing iCloud service usage, as well as hosting and delivering content from the iTunes and App Stores, both streamed and downloaded. Apple has managed to accumulate enough bandwidth from web providers to allow it to move “hundreds of gigabits per second,” however, according to Bill Norton, CSO for the International Internet Exchange, speaking to the WSJ, and that likely means they’re laying the groundwork for much bigger plans beyond existing needs.

The biggest advantage for Apple in building its own CDN might come from improved quality and reliability of services. Apps, movies and music would all potentially download faster if Apple controlled the entire chain, for instance, since it has to spend less time dealing with third-party players outside of its corporate domain, which invariably add delays, miscommunications and possible points of failure into the mix.

WSJ also notes that Apple has been on a bit of a hiring spree when it comes to adding talent specializing in both TV content and CDN tech: Lauren Provo, a Comcast exec came on board in September; Jean-François Mulé, a former VP at a TV research and dev company is another recent hire; the company is also building a roster of CDN specialists, the report suggests.

Netflix’s decision to do the same, which was detailed by GigaOM back in June 2012, was cited as a key factor in the company’s evolution as its streaming volumes increased. It gave Netflix a more direct relationship to the Internet service providers who were the ones tasked with getting their shows to their audience, and Netflix cited YouTube as the archetypical example of how at a certain point of volume, the economic case for doing it yourself becomes overwhelming.

Apple continues to add new content channels to the Apple TV with fair frequency, which adds to its streaming media load, and recent reports suggest that there’s even more coming on the horizon, with a potential SDK for new Apple TV hardware. This WSJ report suggests that’s a very real, very immediate possibility, and offers one more hint that TV may soon be something more akin to a core product line at Apple.

Nymi Armband Adds A Secure Bitcoin Wallet As One Of Its Killer Launch Apps

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Toronto-based wearable startup Bionym’s Nymi band uses your ECG to securely identify you to various devices and services, and as of today there’s another trick up its sleeve – acting as a secure, easy to use Bitcoin wallet. The company revealed today that one of the launch applications that will ship with the Nymi will be a Bitcoin wallet, and that said wallet will provide a more secure method of storing your account’s private key.

All Bitcoin transactions consist of a key exchange: when someone is depositing funds into your account, they use the public key (it’s public since people don’t often get that cheesed about getting free money); when they want to send or withdraw the cryptocurrency, they use the private key. Recently, some evidence has suggested that it’s actually frighteningly easy to get at that private key if it’s stored on a hard drive or shared via QR code.

What Nymi brings to the table is a way to keep the private key securely stored independent of any computer, and tied to your unique ECG biometric signature. This makes it not only secure, but also more convenient than existing Bitcoin wallet solutions, Bionym President Andrew D’Souza explained in an interview.

“People just don’t understand how [Bitcoin] works, and how they gain access to it without putting themselves at risk,” “We see Nymi as essentially being that enabling technology that brings it to market. Everyone who buys a Nymi will get a Bitcoin wallet and be able to securely transact, and understand that their wallet is encrypted, and tied to their biometrics so that even if you lose your Nymi or it’s stolen they won’t be able to access your bitcoins.”

D’Souza says that while Bitcoin has a lot of potential, there’s a risk that it will either fade away into obscurity because of its perceived complexity, or that it’ll get legislated away and receive such a negative connotation that it doesn’t ever hit the mainstream. By making Bitcoin more accessible, and more secure, Bionym hopes to help it avoid those pitfalls. Their vision is of a world where you maintain a Bitcoin savings wallet on a computer, but then use your Nymi like a walkaround checking account for daily transactions.

“With Nymi, when you walk away from your computer your Bitcoin wallet will lock automatically,” explained Bionym Chief Cryptographer Yevgeniy Vahlis. “But it won’t just lock in terms of the interface; there’s nothing there to steal. Everything that’s important about your Bitcoin account is stored physically on the Nymi, so hacking into your computer won’t allow anyone to steal or misuse your Bitcoin, even if they hack into your computer while you’re using your Nymi.”

The Bitcoin Wallet will be shipping with the first Nymi armbands when they eventually ship. Bionym is keeping mum on when exactly that will be, but the company still states an “early 2014″ ship date on its pre-order page for the first batch of units. As with any hardware startup, demonstrating utility to early customers will be key, so Bitcoin integration, if it really can democratize the concept of the cryptocurrency, could indeed be a killer app.

Apple Patents Induction Charging With Orientation-Based Action Triggers

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Apple has received a patent from the USPTO (via AppleInsider) for a method of wireless induction charging that can perform different actions based on the orientation of the device as it’s laid on the charing mat or pad. The patent application was originally published back in September, 2012, and we covered it then, but it’s interesting to revisit in light of recent reports about Apple using induction tech in iWatch prototypes.

The New York Times said earlier this week that Apple is working on versions of the iWatch that use induction charging to power up, so that users won’t have to plug them in. The idea is likely that charging yet another digital device has to be as easy as possible for consumers, who already have to deal with keeping their phones, tablets and computers juiced up and ready to go.

Apple has a number of patents related to this tech, which is already in use among various Android OEMs as well as Nokia in its Lumia line. Apple has yet to release a device that makes use of the tech, however. An iWatch is a good candidate because of its specific battery challenges, and this positional function switching could potentially apply to a smartwatch, too. You could see triggering an alarm or sleep mode by docking an iWatch in a certain way for overnight charging, for instance, or maintaining an active state for mounting when you’re at your desk and working.

Induction charging is far from a lock for a wearable for Apple (nor is the Apple wearable itself, in fact), but Apple is definitely investing in R&D around the tech. And however it addresses it, power management will be a key differentiating factor for any Apple smartwatch, I’d guess, so turning it into a value-add feature with orientation-based actions is an idea with a lot of potential.

Skryf, The Robot That Writes Poetry In Sand, Reminds Us Of The Ephemerality Of Art Or Whatever

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Let us go then, you and I, to meet Skryf, a robot created by Dutch artist Gijs Van Bon. The robot uses a repurposed CNC machine to spray out a thin layer of sand in the shape of letters and Van Bon uses it to print out lines of temporary poetry on sidewalks. As the robot writes, the feet of passersby spread the sand far and wide, destroying the art as it is created.

This video, filmed in July, shows Skryf printing poetry at Dutch Design Week in Eindhoven. “When you’re writing one [line of] text, another one is going away because people start walking through it,” wrote Van Bon on Dezeen. “Once I’ve finished writing, I walk the same way back but it’s all destroyed. It’s ephemeral, it’s just for this moment and afterwards it’s left to the public and to the wind.”

The robot – basically a standard RC quad-wheel with a fairly impressive sand dispenser on CNC rails – receives its orders and then writes about 130 feet per hour. Van Bon takes cues from the places he’s visiting in order to chose the poets Skryf will write out. For example, at Dutch Design week he chose Merel Morre, the poet of the city of Eindhoven. It’s a beautiful commentary on the value of art versus technology in society and it’s also a pretty nice printing rig that could be repurposed to paint in liquids or even chalk. It’s also a clever way to get people to think about poetry again.

Pebble Launches Its Appstore For iOS, Android Version Coming Soon

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Pebble started shipping its new Pebble Steel hardware last week, but until today, the version of the companion app available to the general public didn’t contain any of the version 2.0 goodness that granted access to the Pebble appstore. The new appstore is being billed as the “first open platform for sharing apps optimized for wearables” by Pebble, and as of today, it’s available to the general Pebble-wearing public, so long as you’ve got an iOS device.

The Pebble appstore works with any Pebble running OS version 2.0, which you’ll be prompted to install on your device when you download and install the updated Pebble app. You’ll also get a completely new interface for managing your Pebble and the new apps you can install on it from within the software. As you can see in our review, the update introduces an app and watchface management tray that lets you see what’s already on your Pebble (each smartwatch supports a maximum of 8 third-party apps and faces).

Pebble’s new appstore features apps updated to work with SDK 2.0, and is divided into either apps or watchfaces, with subdivisions within each. The apps section features categories, including fitness apps and remotes, for example, and the watchface category can be organized by popularity, recency or staff picks. In my review, I noted that it struck me as a bit rudimentary, but it’s perfectly functional for a version 1 release, and sort of resembles the early days of Apple’s iOS App Store.

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I’ve already got some favourites picked out from the inaugural batch of Pebble apps: Both Yelp and Foursquare’s official software never leave my wrist, and the third-party Huebble app is arguably a better Philips Hue remote than the iOS app itself in many ways. The PipBoy 100 Pebble watchface also provides some great utility, including battery indicator, connectivity loss alarm when you venture too far from your phone, and what amounts to a loose step counter via an XP display and level up system. And if my life was exciting enough that I owned a GoPro, I’d definitely use the remote app for that gadget.

Already, Pebble’s app ecosystem offers up a number of software titles that can replace entire gadgets, with software for tracking daily activity and progress towards a goal, as well as stuff that turns your Pebble into a hardware remote for controlling your smartphone camera’s shutter.

Grab the updated Pebble app now if you want access to all that appstore goodness. Even if you aren’t one of the few pre-orderers lucky enough to have a Pebble Steel, you’re going to feel like you’ve got a brand new device with this update. Android users, Pebble promises you don’t have to wait long – they haven’t put a specific timeline on when the appstore makes it to Google’s mobile OS, but it should arrive “very, very soon” according to the company.

LuMini Makes Smart Home Lighting Easy And Affordable With Bluetooth LE Connectivity

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A new Kickstarter project debuting today offers a lower barrier of entry to those interested in testing the smart lighting waters. At just $25 for an entry-level pre-order of a single unit, the LuMini is the cheapest way to get started with a smart home lighting system, albeit with some trade-offs compared to category leaders like the Philips Hue.

The LuMini comes from TABU Design, a Hong Kong shop that makes the Lumen Bluetooth smart bulb. The full-size Lumen is fairly large, though, and has a 40-watt equivalent output all for $69. The LuMini has the lower retail cost, but it’s also less powerful: TABU Design says it’s ideal for a “night lamp,” but doesn’t specify how many lumens it actually outputs. It uses 3 watts, compared to 7 watts for the standard-sized Lumen, so you can expect it to be probably around half as bright.

With a companion app, you can control the light color, brightness and scheduling, but the difference from most other connected lighting systems with the LuMini is the Bluetooth connectivity: It uses the low-power standard introduced in Bluetooth 4.0 to connect, which greatly simplifies the connection and setup process, but which also has some disadvantages in terms of range (20 ft. maximum) and the ability to remotely connect to your lighting system, which allows you to control bulbs like the Hue from anywhere with connectivity.

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The BLE approach still allows for things like proximity activation, however, and it can even be set to trigger light-based notifications for incoming calls. The real innovation here is on price, however, since this is a long-lived LED bulb (rated at 30,000 hours) that will retail for around $30. Also, it’s a very small bulb, whereas others like the LIFX smartbulb have been criticized for their larger-than-normal size.

The TABU Design team hopes to ship the LuMini in April this year, which isn’t that much of a stretch when you consider that they’re already actively shipping the original Lumen, which is sold via its website and through Amazon. The project is seeking $50,000 in 30 days, and hopefully it gets there, because what this market really needs is more price pressure to drive mass market adoption.

Apple Celebrates 30 Years Of Mac With Video Shot Entirely On iPhone Over 24 Hours

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Apple didn’t do a Super Bowl ad, as some had suggested it might, but today it debuted a video designed to capture the spotlight all its own. The spot, which is a little over a minute long, is shot entirely on iPhone devices during one 24 hour period, by 15 camera crews. It was then edited on Macs back in LA, paring down over 70 hours of video into the final spot you see above.

The point? To demonstrate that you can do in one day using Apple’s iPhone devices what it once took months and millions of dollars’ worth of equipment to create. It also captures tons of people doing lots of creative things with Apple products, including building fully articulate robotic prosthetics controlled by an iPod touch, to a symphonic performance analyzed and monitored using an iMac.

The spot was edited by Angus Wall, a Hollywood editor who worked on Fight Club, Zodiac, The Girl With The Dragon Tattoo and The Social Network to name a few, and longtime Apple ad man Lee Clow served as creative director. Clow, who was behind the famous ’1984′ Super Bowl ad spot that borrowed themes from the dystopian sci-fi novel of the same name, tweeted this during last night’s game:

Apple may not have had a Super Bowl ad this year, but this post-game spot is arguably better, and definitely more in line with the company’s vision of itself as apart from the crowd.

Why Makers Fail At Retail

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2014 is starting off with a bang for hardware. The $3.2B acquisition of Nest, a four year old company, is great news for makers. The question is, then, should you be starting a hardware company rather than the next mobile app? In previous columns we covered the first steps: from prototype to production as well as early stage financing. Let’s now look into another trap: distribution.

Software vs. Hardware

When you get traction with software, you fire up new servers and scale your infrastructure. It is fast and cheap. And traction alone can get you funding. With hardware, traction is sales, or at least demand. Unfortunately, sales of physical things happen months after production. How do you finance it? How many units should you build? Can you afford to lose money or time?

There are two persistent myths for hardware startups. The first is that the end game is selling at big box retailers like Wal-Mart or Best Buy. The second is that once your amazing gizmo is on the shelves it will sell itself. Those two ideas are dangerous.

Wal-Mart is a problem because servicing retailers is not easy. And the bigger they are, the more cash and time you will need. The Startup Genome project documented that the number one cause of failure for startups was premature scaling. This is even truer for hardware. So before working with larger chains, startups had better get their act together on a smaller scale. It is also questionable whether your product is suitable at all for big box retailers, where your margins are lower and costs higher.

The second is a variation of “build it and they will come.” Sadly, retailers are not in the business of creating demand. You are. If your distribution exceeds the demand you created, it will result in unsold inventory. And we all know what that means.

Crossing the retail chasm

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Hardware projects on Kickstarter belong to the “technology” and “design” categories. By the end of last year, 3,009 of them had been successfully funded. 384 (13%) were between $100,000 and one million dollars, and only 16 (0.5%) were above a million. And that is among projects funded successfully! If you can’t demonstrate demand with the novelty and tech-hungry kickstarted crowd, it is questionable if your product will have enough demand, and if you’re the right team to sell it (we’re not even talking about building it). Some say you can sell a thousand of anything on Kickstarter, but even that is easier said than done.

Now let’s assume your kickstarted project succeeded (over $100k). Once it’s over, your monthly pre-sales are likely to be in the range of 1/20th of your crowdfunding total. That means if you got $200,000 on Kickstarter now your sales are at $10,000/month. Obviously not enough to support a team long term. You are thus entering the “retail chasm” or “bridge of death” until demand and distribution pick up. Financing this gap is difficult as innovators (the Kickstarter crowd) bought your product but you are still far from the mainstream. Early adopters might be waiting for your product to be ready but will only pay later, if they hear about it.

Two key aspects of crossing the chasm between a crowdfunding campaign (where you get paid up to a a year before shipping) to retail (where you might need to finance up to 6 months of inventory) is demand creation and distribution.

Positioning and demand creation

Demand creation is a result of your positioning (which covers your target user profile, pricing and branding) as well as your media, community and marketing activities. If your products are consistently in demand and fly off the shelves (even if you have limited shelf space), you will find ways to finance growth.

Venture funding will not solve the problem of selling products at a loss, it will just dig a bigger grave faster. Learn how to sell profitably before you scale.

Once you’ve crossed the bridge and demonstrated demand, financing becomes a lot easier. From factoring to bank loans or venture capital, money will beat a path to your door!

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Distribution: when and how to scale?

You need distribution, but not any distribution. And not in any order. Among the options are direct sales online and selling via others either online or offline. Each channel has to be evaluated carefully and larger retailers might have to wait for a later phase. Build your retail skills and more demand first.

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According to Charles Huang, co-founder of Red Octane, creators of the Guitar Hero franchise and of the gaming hardware startup Green Throttle: “Startups should know their return and defect rates before they try to scale. They can learn this through online sales or small boutique store sales. Maybe the second version is when the scaling should happen.”

So the advice is to learn about retail by doing it first on a small scale. This will give you enough time to learn the ropes, maybe until you get the second version of your product ready.

As Marc Barros, co-creator of the Moment mobile lens (currently on Kickstarter) and founder of Contour Cameras says: “Retail is not a sprint but a long slow build, so take one step at a time.”

Possible steps along the way are: direct sales online, specialty retailers (online and offline), Amazon and other large online retailers, then big box retailers. You need to understand the hidden costs of servicing each of them. In the case of offline retailers, it includes a laundry list of expenses related to in-store marketing, demo products, sales events and more.

The key points to remember are: keep demand higher than distribution, remember that your customers are your best investors, take one step at a time, and keep cash flow healthy.

If you can do that, you might become the next Nest, Square, GoPro or Xiaomi, or a flourishing hardware SME!

 Cyril Ebersweiler is the founder of the hardware startup accelerator HAXLR8R (apply here) and Partner at SOS VenturesBenjamin Joffe is an expert on startup ecosystems, angel investor and Advisor at HAXLR8R. Both spent over a decade in China and Japan and invest in startups around the world. This is the third part of a series on Lean Hardware.