littleBits is an opensource library of electronic modules that snap together with tiny magnets for prototyping, learning, and fun. The company was created as a way to make electronics and learning more accessible for the iPad generation. We sat down with CEO and Founder Ayah Bdeir to discuss the pitfalls of crowdfunding campaigns, finding the right investors and the open source hardware movement.
Tell us a bit about yourself and how you got started working on littleBits.
I have a background in engineering. I did my undergrad as a computer engineer and then did my Masters at the Media Lab at MIT. I've always been very interested in design and actually wanted to be an architect. When I started engineering, I kept trying to find ways to bring more creative practices into engineering. When I went to the Media Lab it started my mission that I've been on for the past many years on how to make electronics accessible, and how to make electronics a creative medium.
I started littleBits as a prototype when I was a fellow at the Art and Technology Lab in New York, called Eyebeam, and made some prototypes and put them on my desk and put them on my website. Then suddenly people started picking it up online and I started getting orders from all over the world. There was only me at the time, so I continued, and I obsessed about the problem. I obsessed about this idea of how to make electronics accessible and how to make them modular. Three and a half years later, I had a product, and that's when I decided to start a company.
I started working on littleBits in early 2008, but there were a lot of complex engineering problems that I was trying to solve, including making them modular, making them connect with magnets, manufacturing the magnets and making them scalable. The engineering problems took about three years of development and it wasn't until about late 2011 that I had the first functional preview product.
Tell us about the Karaj project that you worked on before littleBits.
After I started working at the Media Lab, I started doing my artwork with electronics and started to collaborate with artists, musicians and developers. I started to realize that there's a critical type of space that enables very creative innovation, which the Media Lab and Eyebeam and many other hackerspaces for Makers represented. I felt that in Lebanon, and the Middle East in general, professionals were still very silent. If you were an engineer, doctor or an artist then you didn't communicate, or collaborate, or even share ideas.
I started Karaj after being inspired by the other places that I had been when my career had started to take in Beirut and started to get traction. It gave service to the hackerspace in the Middle East and it gave birth to a couple of entrepreneurs that started companies. I'm pretty happy with what we did. Unfortunately, I could not continue it because I was self-funding, and we got to a point where I discontinued it.
What different prototyping phases did you go through with littleBits?
Initially there was the think-storming and the trip-out and some testing that I did informally with people to see how they would play with it and how they would act with it. Then I started to try manufacturing and realized that there were many things that weren't manufacturable. I would revamp the design, then test again, and then try to manufacture again. The loop between design, test and manufacture was repeated about 22 times throughout the three years at different lengths, until I had something that was a design that was manufacturable and I could make many off them.
Once you had the prototype, what was the path to getting it to market?
I initially set up the company on September 7, 2011. We immediately placed an order for the product to get produced and then put the first product on the market on December 7, 2011 and we sold out within two weeks. We suddenly started getting a lot of press and attention and spent most of 2012 trying to ramp up production to meet demand. We won about twenty toy and education and tech awards, and started to get a lot of traction from schools, engineers and hackers. In 2011, I applied to be a TED fellow and I got accepted in early 2012, and as part of being a fellow I gave a TED talk. Even though not all the fellows get their talks broadcast on the website, they ended up putting mine on the website and it blew up. It went around the world and had about 700,000 views and even today people say, "Oh, I watched your TED talk."
How do you integrate your open-source community’s feedback into designing littleBits?
The product is open-source and so we put the design plan up. We have a page on the website that's called dreamBits where people can put ideas and bits that they want us to make. We get feedback from people that want certain projects or kits and it really feeds the development process a lot. It generates this incredible, international footprint that allows the product to be very diverse. We will listen to it and get feedback all the time and roll it into the product.
"I really believe that open source leads to more innovation and more interesting products that emerge, and it was always a part of what I wanted to do with littleBits."
littleBits started before the popularity of sites like Kickstarter and Indiegogo. What are your thoughts on crowdfunding?
I love crowdfunding; I think it's great. It's given rise to a lot of great companies. I've also seen a lot of hardware companies fail and try to launch too fast because of crowdfunding. They put a campaign up and then they say they'll start shipping within three to six months, and hardware is hard. It takes a lot longer than three to six months to make a product, and to manufacture a product. They embark on it and then they keep delaying production and shipment and it causes frustration.
I'm happy that I didn't go through the development process of littleBits in public like that, because I feel like it would have forced me to cut corners, or it would have forced me to rush into making decisions for the product. I took my time. I kept working on it until it got perfect as I saw it, and that's when I launched.
What made you want to make this an open source product?
I've been very inspired by the open source software movement and what it's done to innovation and I was a very active and leading member of the open hardware community. I was an open hardware fellow with Creative Commons and also spearheaded the open hardware definition that then led to an actual license that's being used. I really believe that open source leads to more innovation and more interesting products that emerge, and it was always a part of what I wanted to do with littleBits.
What made you want to take on outside funding and choose the investors that you did?
There are so many upfront costs with creating hardware. I could bear all the development costs and R&D costs when I was developing the product, but when it comes time to placing an order with the factory you need to be able to have the cash. You also need to be able to change the design and try again when things go wrong. I saw a vision for what was going to be the product and the company and I didn't see any other way but to raise money. I was very picky with the investors that I went with. As a result, I have wonderful investors that are extremely supportive of the mission of the company and really understand hardware very well. Our lead investor is True Ventures, who I find to be incredible.
What was behind the partnership you did with PCH?
PCH is global supply manufacturing company and they have been very good friends and supportive of littleBits. When we did our Series A last year, we closed a deal for them to take over our entire supply chain. We were one of the first companies in their accelerator program and offered them the ability to create a system to work with more startups. PCH provides the expertise and field knowledge in supply chain and logistics in the effort with suppliers for us.
"Hardware cannot work as beta software, as much as we would like it to."
What advice would you give to an entrepreneur starting out in manufacturing and building out their supply chain?
My advice is to not try to rush too much and to acknowledge and accept that hardware cannot work as beta software, as much as we would like it to. It really requires more attention and iteration. You should really be testing a lot along the way and making sure that you like the products you make. Once you roll into production and you're making 100, or 1,000, or 10,000, there's no stopping it there and small mistakes multiply. If you have the wrong part, or a misalignment somewhere or something that's slightly off in voltage, a small problem multiplies exponentially. I would just say be thoughtful in what you do and be thoughtful in what you develop, and don't just copy other people. You have to bring innovation to it.
How are you bringing littleBits into the education market?
We didn't have an education team up until about two months ago. We had an education account manager who has been our community manager and she took up responding to emails, but that only started in March. Up until March, our growth in education was purely organic. We are now in about 400 schools, and a lot of it is through the teachers themselves, and technology providers in the schools who find out about littleBits and bring it to class and test it. Then suddenly teachers start to share it among each other in classes. They start to share it and then we start to see schools coming back for more and more orders.
What different distribution channels have been most effective?
Our website is mostly where our sales are coming from now. We do have some wholesale, but we've been very cautious with wholesale because we don't want to launch too quickly and we want to be ready when we launch in terms of having the exact right product, price point and supply chain. We're taking our time with wholesale. In addition, Amazon is a really good channel. We got started right away on Amazon and it ended up being really good for us.
What’s your current state of mind?
When and where were you happiest?
1 month ago on a beach in Jamaica.
What is your idea of misery?
February in New York.
What is your greatest fear?
What do you consider your greatest achievement?
Making a product that is popping out in kid's hands from South Africa to Banglore to Puerto Rico.
What is your greatest extravagance?
Shoes. Always shoes.
Which words or phrases do you most overuse?
"It will be fine."
Which talent would you most like to have?
What’s your favourite quote?
"Fake it till you make it."
What's the best piece of advice you've ever gotten?
To not start a company unless you are obsessed about that product or that idea or that problem.
What would you say is the best advice you’ve ever gotten?
The best of advice I've gotten over the years is to not start a company unless you are obsessed about that product or that idea or that problem, because starting a company is very difficult. It's very difficult every day. It has high highs, but it also has a lot of lows. If you are not really solid and passionate and obsessed, you won't make it through.
Dave Scott from Amiigo asked, “What piece of advice got you through the toughest part of the journey?”
I think it was to pick the right investors. Sometimes in your rush to want to do things, you start to see all investors as equal and all the money as equal. I was given the advice that it was really important to pick the right investors because they're partners and it’s essentially like you are getting married. You need people who become family, that you could rely on, that can help you build the business and not just give you money and disappear. That's been something that's been very helpful at different times, when I've needed help, when I've needed support, when I've been lost for a big decision; my investors have been great.