Dragon Innovation, which has played an advisory/consultant role for consumer product companies such as Pebble, Rest Devices, Makerbot, Rethink Robotics, and Formlabs, is launching its much-anticipated crowd-funding site today.
In addition to the official site launch, Dragon announced in a press release that it has has partnered with General Electric’s Idea Works Team, "to give hardware entrepreneurs unique access to senior staff within GE, R&D collaboration (including Global Research Centers), technology transfer, licensing opportunities, and help with go-to-market activities."
Additionally, the site launch coincides with an announcement that Dragon is partnering with Arrow Electronics and Freescale, "to help entrepreneurs introduce innovative products, reduce time to market, and enhance overall competitiveness."
What differentiates Dragon’s crowd-funding platform from existing ones such as Kickstarter and IndieGoGo? Unlike, other crowd-funding sites, Dragon Innovation doesn’t just serve as a place to raise financing for innovative and creative products.
Dragon plays a more active role in the process. It leverages its experience in product development to help crowd-funded projects during the planning and manufacturing stages in order to eliminate the financial mismanagement and supply chain snafus that have led to campaign’s failing to ship their promised goods.
As Scott Miller, Dragon’s Founder, explained, “What we are looking to do is have a tightly integrated process all the way through so that we can help makers, every step of the way, succeed in getting the product in the customer's hand and fulfilling the promise to deliver.”
Today’s launch features only a handful of Dragon Innovation campaigns, with many more in the works. A couple of the campaigns on the site today have had some prior relationship with Dragon including Rest Devices’s Mimo and a limited offering of watches from Pebble. However, there are many exciting new products that have already started to inch toward fulfilling their financial threshold including Needham-based Technical Machine’s Tessel and Weartron’s cool Run-n-Read product.
Scott Miller's Path to Crowd-funding
As Thos Niles, the company’s VP of Product and Customer Experience told me, “The best way to tell the story of Dragon is to talk about Scott Miller.”
Miller's career, one built on finding new, creative, and efficient ways to build products is quite remarkable in itself.
A graduate of MIT, Miller was part of the team that created the 'Robo Tuna', an innovative robotic fish that mimicked all of its namesake's movements. Miller then took a job at Walt Disney Imagineering's R&D Lab in Kendall where he worked on creating a life-size robotic triceratops for three years.
Miller's time at Disney was full of amazing adventures that give a glimpse into a different era in Boston's innovation history. Miller told me a few stories about enless budget tool splurges, the constant fear of having a team member crushed by a 12,000 pound robotic dinosaur, and the time he may have labeled a half-a-million dollar computer, that they were storing in the hallway, as biohazard waste so that it wouldn't be stolen while they figured out how to get the refrigerator-sized hardware up to the R&D lab.
Literally working his way from small robotics to big robotics, Miller then joined a little robotics startup called iRobot and led the engineering team for a product they hoped to bring to every household in the country, a robotic vacuum. He also worked on a joint iRobot/Hasbro venture to create what became the too-lifelike-its-creepy, My Real Baby. Eventually, he was selected to run iRobot's manufacturing oversees and, after spending months constantly flying between Hong Kong and home, decided to move to China.
During the My Real Baby project, Miller learned more about design for manufacturing and assembly, and, as he said “became more fascinated with how stuff is really built.” This passion led Miller to dive headlong into trying to solve some of the mechanical production and quality problems that had the potential to be financially devastating for a company creating a product like iRobot. In doing so, he played a key role in iRobot’s massive growth and returned home to take a role as the company’s VP of Engineering.
However, he started to think more deeply about the whole supply chain process. While working on the production side, Miller had a observation. As he explained, “What we used to do for product development is spend millions of dollars in stealth mode trying to build something, while using expensive focus groups to find out if a product is something people want to buy and how much they’re willing to spend on it. Then a company will get ready to launch and spend millions of dollars more on marketing to create demand hoping that it’ll translate to sales.”
“In some cases it works,” he said, “and in some cases it doesn’t. You never really know until the end, after all this money, whether you’ve got a winner or not.”
Miller knew there had to be a better way to do things.
He left iRobot, and while figuring out what to do next, was approached by a bunch of companies who wanted his insight on how to quickly and affordably transition from a product prototype to large volume manufacturing. Seeing an opportunity, Miller started Dragon Innovation in partnership with some key connections he had made from his days working for iRobot in China.
As Miller explained, people kept asking him, “How do we pick a great factory? What do we need in a quality plan? And how much should this stuff cost?”
“These are all things that I’ve been doing for a long time and really loved doing,” he said.
"That’s the seed of Dragon and we’ve developed that over the last five years or so.” Dragon Innovation has been “working with a hundred or so great clients as a running count,” Miller said, “to effectively serve as an API for manufacturing. We can help at about every step of the way to go from the functional prototype with all the stuff they need to get the product on the loading dock.”
A Better Way to Crowdfund, A Better Way to Build Products
“When crowd-funding popped up on the radar screen, we realized that here was the way to do product development the right way.” Since his time working for iRobot, Miller knew that there had to be a better, more financially viable way to develop products without the risk and massive amounts of money involved in the prototype/test/market system that he observed while working for the robotics innovator.
Crowd-funding was the answer.
“It's a lot better if you can get product market fit and validated up front before you spend all this time and money building something people may not want,” Miller explained.
The benefits of the crowd-funding system are great. A company can create a community of backers who will buy a product before its even made, the campaign itself is all the marketing that a product would need, you can easily track of the amount of inventory needed, and, as Miller said, “best of all, you get the cash up front to build the inventory and the tools.”
So, Dragon Innovation got into the crowd-funding game. Last month, they announced that they had raised $2.3 million from Flybridge Capital Partners, Foundry Group, and the Box Group.
Today, they went live.
“We had an epiphany,” Miller said, “We saw the downside of what happens if it goes wrong, and we were flooded by entrepreneurs that would have run campaigns, but they didn’t understand the fundamentals of the business.” Dragon wanted to put an end to crowd-funding projects disappointing backers.
“We always want to see entrepreneurs succeed,” he said. The benefits of working with Dragon for crowd-funding is their understanding of all the components of the supply chain that innovators may not even be aware of, like costs for materials and scrap as well as being able to suggest lower cost components.
Working with Dragon allows entrepreneurs to “set an appropriate threshold so if they run a campaign and are funded, that everyone is confident that there is a clear path and enough fuel in the tank to actually go out and build the product,” Miller said.
Unlike other crowd-funding platforms, Dragon Interactive does charge a $5000 “up front fee” for its services. Some media outlets have been somewhat critical of the fee (citing a poor track record related to Pebble’s slow product deployment, which is a bit of a stretch seeing that Pebble turned to Dragon AFTER its Kickstarter campaign exploded). However, if Dragon can deliver on its plan to create a more successful approach to crowd-funding, I am sure there won’t be a shortage of “makers” lining up to join the revolution.
Dennis Keohane is a staff writer for VentureFizz. You can follow Dennis on Twitter (@DBKeohane) by clicking here.