Thursday, July 24, 2014

Can Heathkit Make a Comeback? Yes, and Here's 10 Reasons Why.

Despite all the reasons I listed in my last blog post on why Heathkit could not successfully reenter the kit business today, I believe they still can. Here are some reasons why, and how, they could do it.

1. Reinvent yourself. Heathkit started as an airplane manufacturer, then got into aviation electronics. Then test equipment, amateur radio, audio, and computers. The company twice lost their president in airplane crashes and had to reinvent itself. The new Heathkit could and probably should be different from the Heathkit during the heyday of the past. There are many opportunities for products different from those that Heathkit traditionally offered. They need to think outside the box and come up with new ideas for product opportunities.

2. Leverage the Internet. The Internet means there is no longer a need for brick and mortar stores. No printed catalogues or advertising. The Internet means global markets. To be successful, Heathkit needs to adapt to the times. As just one example, the large effort to write assembly manuals could be crowdsourced by allowing users to edit and improve the manuals, much like Wikipedia. Support for building kits could be handled by on-line forums. People who are active in helping others in the forums could be rewarded with some type of badges, promotional items, or discounts on kits.

3. Buy some expertise. Buy out or recruit some successful small kit companies, like Briel Computers, for example, or license their designs. Expand them in size to offer better ordering, distribution, manuals, and packaging than a one person outfit can handle.

4. Fill a size niche. I think there is a gap between the small one-person companies and the large electronics firms that Heathkit could fill and be successful while still remaining small and lean.

5. Crowdfund startup costs. Get initial funding using sites like Kickstarter and Indiegogo. Take one good idea, maybe a new solid-state ham radio transceiver like a redesigned HW-8, that is internally a new design but has the original retro look. Fund the cost of getting it to market and get initial orders using crowdfunding. That revenue could then fund R&D for future products.

6. Steal ideas from successful competitors. The experts said you couldn't offer a kit that competed with commercial amateur radio equipment for price and features. Elecraft did it. They said the market for hobbyists is too small? AdaFruit is doing okay. Learn from the successes of competitors and adopt ideas that worked for them.

7. Partner and contract out. Sell through Amazon. Have someone else do kitting. Avoid the need for a big factory and inventory. Run the company as a virtual distributed organization with staff located world-wide.

8. Link it to education. There is a huge demand for learning materials for electronics hardware and software, as evidenced by products like the Arduino and Raspberry Pi. Leverage Heathkit's expertise in developing training materials and courses (one of the last areas where they were successful).

9. Capitalize on nostalgia. Offer some of the original kits again, even if only on the outside. Consider offering some vacuum tube designs. Make the assembly manuals look like the old ones, possibly offering a printed manual (rather than download) as an extra option when ordering a kit.

10. Build credibility and reward early adopters. Lots of people would like to see Heathkit succeed. Offer incentives to people who pre-order. Reward early purchasers and they will give you free marketing. Be open about plans for the future, and the keep promises you make. As just one example, why not make the legacy Heathkit manuals available as free downloads as a goodwill gesture and a sign that Heathkit is serious about coming back?

In summary, I believe Heathkit could re-enter the kit business if they adopt some of the ideas I've outlined here. It won't be easy, and the clock is ticking as the old Heathkit becomes a faded memory, but it can be done.

1 comment:

Tom Bewick said...

Jeff, I think they could come back too, but I don't think they will. If you have been following they posted over a year ago in a rather long on line question and answer session that they would be back in business in 2014. Well here we are winding down the year and no kits yet. Or any further news. I completed the on line survey so I would get updates and I have never gotten an update. Not a peep.