A Lesson in Product Repositioning: How Swivl Captured Education
With any hardware startup, the general intent is simple: Create a killer product unlike anything else, secure the funding needed for manufacturing and scale, and get your idea to market. Product repositioning is not part of the strategy—until it needs to be.
For Brian Lamb and Vlad Tetelbaum of Swivl, that lesson in market viability came early. Lamb, a mechanical engineer, and Tetelbaum, an electrical engineer, had a vision to create an affordable video-recording solution built on a robotic platform. The result was Swivl, a small dock for mobile devices and DSLR cameras that panned around, controlled by a Bluetooth remote control. They crowdsourced the initial funding to produce the first generation of the product, and they had the perfect market: photographers and videographers.
But they were wrong.
“They would get people buying it in small numbers, and they would get them using it initially, but there was no stick,” says Mike Pierce, Swivl’s senior director of operations. “That was the very first sign to them, that people didn’t continue to use it beyond . . . the first couple times it came out of the box. It was clear that in the consumer space, there wasn’t a compelling use case for the product.”
Getting an Education. Fortunately, that first-generation Swivl caught the attention of several teachers, who viewed the device as a worthy tool for their professional-development needs, as many districts require teachers to submit teaching videos. Seeing this interest within education, Lamb and Tetelbaum pivoted Swivl’s entire market strategy: They started a demo program for educators, and they ramped up their sales channels, hiring knowledgeable personnel from the education-technology field to target universities and school districts across the nation.
But that inaugural unit wasn’t perfect, and those early-adopting educators gave pointed feedback regarding specific changes that would be necessary to meet teachers’ needs.
“There were real limitations with the first-generation device,” Pierce says. “It could only hold an iPhone. It didn’t last that long because it was using AA batteries. So taking all of that feedback and hearing that people really had a use case for it out there, they redesigned and went to the second-gen, which is the white-and-black one you see on the site now. . . . They changed the way the motors, pans, and tilts work. It basically allowed them to hit that market pretty spot-on.”
That second-generation device offers compatibility with nearly all mobile devices and tablets and syncs through Bluetooth; it contains a wireless microphone with the ability to track and record the speaker from anywhere in the room; and its associated app and cloud-based services give educators the ability to upload videos and share lesson-plan materials. It’s also affordable, with a starting price at $399 per unit, with included cloud account.
Learning Hardware the Hard Way. As any hardware startup knows, the manufacturing piece of the business, especially at scale, has its own set of issues. For Swivl, the single biggest manufacturing challenge is, literally, all of the unit’s moving parts—400 at last count—and how they interface with each other.
“There are so many things that are really, really close to each other, and all have to move and work perfectly,” Pierce says. “There are just so many little parts that depend on each other in a device like this, and they all stack up the line. So one little pea under the mattress can screw everything up.”
With such a proliferation of parts in one device, manufacturing success depends on the accuracy of its bill of materials (BOM), the list of parts required to build the product. But when Pierce joined Swivl in 2014, he inherited BOMs housed in monster Microsoft Excel workbooks—one for mechanical parts and one for electrical—with no real accountability for changes.
“It was tabbed across for each of the subassemblies, and the way you knew that something was part of an assembly was how far spaced in the cell it was,” Pierce says. “The challenge was that, you look for anything, you go digging for something, or you have a problem or something, how can you know if something’s missed? It was a really, really, really tough thing.”
Pierce found a BOM-management solution in Autodesk PLM 360, which enables him to not only manage the sheer volume of components and their relationships but also make changes, know why he made the changes, and track them. In the future, Pierce plans to get his factories in Asia on the PLM bandwagon to take advantage of its cloud-collaboration features. But even with those enhancements, much of the Swivl manufacturing process remains frustratingly manual.
“For example, you’ve got two different motors; those have to be hand-placed into assemblies and checked to make sure they’re working correctly and there’s nothing wrong,” Pierce explains. “A lot of parts just have to be manually attached to the product and then tested to make sure that the tolerances are right and are working correctly—a half-millimeter out on a gear means it’s going to grind and make noise and not work well. So controlling that has to be done by hand. Even with fixtures and jigs, the final look has to be done by hand.”
Doing most of that inspection in work is a small team directly in the factory in Asia. That team manually tests each core assembly in line. “When we were getting started and we were seeing problems coming through, we would stop every shipment and look at every piece here,” Pierce says. “And if we had to rework it and fix it or send it back or whatever, we did so that we knew the quality was right.”
Talking ’Bout a New Generation. The good news is that those manufacturing headaches wouldn’t exist if Swivl didn’t have a viable product making inroads in a receptive market. The team is currently on track to produce 20,000 units this year—but Swivl isn’t stopping there. With a fresh injection of investor funding, the team is already working on its third-generation device.
“In the world of hardware—even though we offer managed services, as well—you’re only as good as the next thing on the plate, the next thing on the docket,” Pierce says. “So we’re constantly having to push the edge.”
Thankfully, being in the education market means that Swivl can turn out new products at a slower rate than they would for the consumer space. That ease in iteration offers other benefits, too. With a longer lead time between product generations, Swivl can contract key roles, such as mechanical engineers, as needed, keeping costs down—yet another gift afforded by product repositioning.
That strategy shift is what Pierce sees as the true crux of the Swivl story: “Here were some guys who . . . decided to make something, and it didn’t work the way they expected it to in the world. And instead of saying, ‘Okay, that’s all right. We’ll go make something else,’ they said, ‘No, how do we make this work in another place?’ You hear so many failure stories and so many success stories, but you don’t hear the details behind the success stories and how they got there. These guys have done it . . . and they’re growing.”
– Erin Hanson, Content Marketing Manager