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Constraints, Creativity, Startups, Funding

When options are limited, people produce more solutions  – not less.

When people are limited they try to improve and optimise.

 

The opposite is true.

It is known as Parkinson’s Law :

“Work expands so as to fill the time available for it’s completion”

 

Well, seems like what is true for time budget is also true for financial budget.

The more money there is available the more money you will use for your project.

 

Introduce Juicero – a startup that has come under heat recently for doing just that.

Juicero sells a machine that makes juice.

They have also received some nice juicy VC money too (investment) of $120 millions.

That’s a lot.

Especially, to make a juicer.

Even more, when this juicer also costs $700 when they launched.

Today, they have cut the price down to “only” $400

Yet, it remains expensive.

So expensive, than Bloomberg went to investigate.

As you can see for yourself – the all Juicero machine sounds like a scam by now.

But honestly, creating a hardware company, raising $120 000 and working for 2 years to build a product is not the smartest way to set up a scam to get rich quick.

The reality is simpler.

And a bit sad.

Ben Einstein (yes, it is his name… no I don’t know if he is related to Albert – but in any case he sounds like a smart guy) did some research on the over-expensive juicer (full piece here).

What he found is simple:

The engineering team had too much money.

(Remember they rose $120 000)

What they have build is a wonderful machine.

A solid piece of engineering.

But an expensive one.

Teardown of Juicero juicer by Ben Einstein

The Juicero Press can :

  • connect to your WiFi network (via TI’s CC3200 chipset, purple arrow),
  • has optics/camera assembly for scanning QR codes on the juice packs (green arrow),
  • to illuminate QR codes – equipped withLED board (blue arrow)

Juicero press teardown – by Ben Einstein

 

I am just going to quote Ben here:

“It is exceptionally rare to see a custom power supply on a first-time hardware startup’s product as these are inspected very carefully as part of UL/ETL certification, creating additional cost and risk.”
Notice the motor (blue arrow, part number JQ42-1210N1) which is manufactured by Jiaai Motor Company, a common supplier of cordless drill motors. Like many of the other systems on this product, the motor is seemingly custom to account for the exceptionally high rated power (stalls at 5A at 330V DC, which is hard to believe, possibly even a misprint on the motor casing) and sports a custom encoder system designed by Juicero (yellow arrow)”

If you read the whole piece, you will see it goes on and on and on.

The amount of customisation these people went through to make a machine that just press juice is quite amazing – and expensive – and possible stupid.

It is like they have tried to make a Apple computer version of a juice machine.

If apple had done this product and call it iJuice,  I am not sure anybody would have been that surprised.

The only difference is that Apple is making product that people buy.

Juicero not quite yet.

So, there is that.

Time will tell.

But one things comes to my mind, when we have all these investment in startup land and these companies keep failing.

The core of the problem might be the same thing that we try to use to enable innovation: resources.

If we give too many resources to a team, you might not see this team actually succeed.

Because of the lack of constraints.

Food for thought.

 

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