Hi Ujjwal,
Well congratulations on persevering on your project over the past year!
I think there is a common mistake some people on this forum make, which is concentrating on the BOM cost. They make this mistake because coming from a DIY background, their vast amounts of personal time are unaccounted for, and the only costs they see are material costs. But that is not how a business runs.
Here's what those people don't see. Consider a popular video game sold over the Internet. It might be sold for $50. The actual cost to transmit the game might be pennies, which is the closest equivalent to BOM costs. The rest of that $50 goes to fixed development costs, transactional costs, marketing, distribution costs (resellers), customer support, and hopefully a small amount of profit.
Hardware is just like the video game, except that in addition to all those costs, the BOM/COGS cost is very significant as well.
Rarely have I heard someone object to the $50 video game price because it only costs pennies to transmit. But once hardware is involved, some people become infatuated with the BOM costs, neglecting all the other costs. This is a big mistake in general, but doubly so in biotech, where the volumes are small compared to a video game, but fixed development costs equally large, so those fixed costs have to be spread across a smaller number of units. This is why biotech equipment in general is so expensive.
OpenPCR was never intended to be a business. It was a personal project between me and a friend, and initially we didn't even intend to sell kits but just release an open source design. Honestly it was started before I understood the above, and being a software person at the time, I also didn't understand the R&D effort required. The project stemmed from a conversation during a long car trip. I think at the time I thought it would be a 2 week project, and it ended up consuming 1.5 years of my life :) I learned a lot, but OpenPCR was never about making money.
Chai is different. We've raised millions from Silicon Valley investors. The concept behind Chai is not to make low cost equipment, but to expand molecular diagnostics to valuable industrial applications. Doing that necessitated making things easier and cheaper. Honestly our devices are priced out of the reach of most biohackerspaces, but we're focussed on continuing to reduce the costs of molecular diagnostics to expand the market size. Eventually this technology will be affordable even to consumers.
-Josh
--
Josh Perfetto
CEO
Chai
3206 Scott Blvd | Santa Clara, CA 95054
Tel: +1 (650) 488-8550 | Mobile: +1 (650) 469-3222
On Fri, Apr 28, 2017 at 4:55 AM, Ujjwal Thaakar <ujjwalthaakar@gmail.com> wrote:
Hi Josh,I spent most of the last year learning to make hardware and have a prototype ready. It's not great and market ready yet. Turns out I highly underestimated what it takes to build a product.Now I'm trying to figure out the business opportunity. What has been your experience at Chai as the original pioneer of low-cost PCR? What has the market response been like and what difficulties have you faced. A lot of people on this forum including me talk about developing open source low-cost equipment but what reality are we missing that you have experienced since you are one of the handfuls to have actually built a successful company out of this.On Sun, Apr 23, 2017 at 1:47 PM Josh Perfetto <josh@snowrise.com> wrote:You received this message because you are subscribed to a topic in the Google Groups "DIYbio" group.Dennis said it perfectly on all 3 counts.Ujjwal I thought you were going to develop lower cost PCR. What has stopped your efforts from succeeding?-Josh-JoshOn Fri, Apr 21, 2017 at 8:47 AM, Dennis Oleksyuk <dennis@oleksyuk.me> wrote:Because building hardware is harder than building software. It requires more skills, time, and money. That's the main reason which applies to hardware development as a whole.Because the number of customers who buy scientific equipment is small. Therefore the manufacturer has to divide the development cost between a smaller number of customers.Because the cost of consumables and labor for solving a particular problem is usually higher than the cost of the machine. Therefore the buyers are more interested in saving in labor and consumable cost rather than hardware prices.--On Fri, Apr 21, 2017 at 8:42 AM Gerald Trost <gerald.trost@mail.com> wrote:
this is only my honest opinion from my experience:
I bought a open source 3d printer - in industry they had
such things for 3 decades - but they costedseveral hundred thousands
the open source thing works fine but for 90% of the timeits in maintenance and I am the machine engineer
I think the open source things are not yet reliable enough.Sent: Friday, April 21, 2017 at 1:57 PM
From: "Ujjwal Thaakar" <ujjwalthaakar@gmail.com>
To: DIYbio <diybio@googlegroups.com>
Subject: [DIYbio] Why are PCR machines and biotech equipment in general so expensive--How do the economics work out and why have we not seen bigger companies bring down the process in the advent of open source equipment as well as new startups building low-cost equipment?--
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