A new approach to R&D helped waffle-iron startup Wonderffle dig itself out of a financial hole.
It was mid-March, and Mike Bradford had some time on his hands. With no inventory to sell, thanks to the Chinese supply chain‘s shutting down, it was the perfect opportunity to finally build that prototype of his company’s newest product.
Unfortunately, the lack of inventory also meant a shortage of funds–and a critical situation for a startup. Bradford, the founder and sole employee of Pflugerville, Texas-based Wonderffle, has been making stuffed-waffle irons for home kitchens since 2016. His plans for 2020 included an expansion to the restaurant industry with a commercial-grade product featuring swappable parts for different waffle shapes. The prototype’s manufacturing cost: $15,000.
That is, until the coronavirus pandemic tanked his 2020 financial projections. Bradford says Wonderffle, a side-hustle that he hopes could eventually become a full-time gig, was set to earn $165,000 in revenue and $45,000 in profit. But with no product to sell, he had to cut the prototype’s cost in half–which required some creativity.
The challenge
Bradford’s original plan was to dismantle a commercial-grade waffle iron in his garage to learn how it achieved its durability and cook time. He’d use those takeaways to inform the design of his stuffed-waffle version, 3-D print the pieces at home to make sure they fit, and then ship off those designs to be made from metal. In five days, he’d assemble his prototype.
Most of those steps remained doable. The last one was a problem: The metalworking company he’d always used for prototypes was quick, but due to the cost of the metal and the short turnaround time, it was also expensive.
How he did it
First, Bradford decided to create only the base version of his waffle iron from metal, and save money by using the 3-D printed versions of the product’s swappable parts. The plastic pieces wouldn’t actually function–they’d melt when tested–meaning the prototype would be largely for show.
Using a semi-functional prototype to pitch potential clients certainly wasn’t ideal, but it was significantly cheaper. His new projected spend: $8,000.
That’s when Bradford’s 3-D printer broke, which was a blessing in disguise. While looking to outsource the plastic parts, he found a St. Louis-based 3-D printing company that also worked with metal. Its prices were dramatically lower than those of Bradford’s original partner. The company could make every prototype component entirely from metal, for just $6,000.
The catch: The new company outsourced its metal work to China, meaning the machining and shipping processes would take much longer. Instead of assembling his prototype in five days, Bradford had to wait a month. In normal times, this would have been problematic–but mid-pandemic, Bradford says, most restaurants aren’t exactly eager to spend money on new kitchen appliances.
As a bonus for saving so much money, Bradford is now considering adding some of it back to the marketing budget for his home kitchen products. That could be crucial, he says, once his long-awaited inventory finally arrives in late May or early June: “With those dollars, I’m optimistic that I can approach the same [revenue] numbers I was hoping for originally,” he says.
The upshot
The pandemic has thrown off everyone’s timelines, forcing many small businesses into painful delays or uncomfortable scale-ups. You can use that to your advantage. It might be acceptable, for example, for your processes to take longer than usual if that slowdown ultimately saves you money.
Bradford says he’s also grateful for the market research he’s conducted while waiting. “That’s one piece that I’m putting into the workflow now,” he says. “I want to be able to speak more intelligently about what I can offer, as opposed to what [restaurants] have right now.”
When you find efficiencies, take note. You could discover that some of your new strategies are actually solutions worth keeping. When the crisis fades away, your business will be stronger for it.