At the heart of the hardware revolution is an Irishman called Liam Casey who is cultivating a reputation as Silicon Valley’s go-to guy in San Francisco, California, for bringing products from concept to consumer.
There is an optimism to San Francisco that is unlike anything anywhere else on Earth. You can almost taste it in the air. Things move fast, people brainstorm with strangers they’ve literally met on the street and today’s big idea could be jettisoned tomorrow. Move on.
These were my thoughts as I took in my surroundings at PCH International’s offices in an industrial quarter of the city. The building, a former newspaper office of the San Francisco Guardian, repurposed for this new innovative age and complete with bright murals and wide-open meeting spaces.
On the floor above me the scene is like something from Santa’s 21st-century workshop: carpenter’s tools, stencils, electromechanical testing stations, 3D printers, CNC machines and a group of engineers gleefully testing out something on a drone.
Next door a 100,000 sq-foot building is being fitted out to accommodate PCH’s Highway 1 start-up accelerator which is currently located just a few blocks away.
I’m here to meet the man himself Liam Casey, who is known in the tech industry as ‘Mr China’ because of his knowledge and contacts among the Asian manufacturing community.
Casey, who a few years ago was named by Enterprise Ireland as ‘International Start-up Ambassador’ in China, established PCH in Cork where it is headquartered.
Working across the entire technology spectrum, PCH International completes the design and delivery of products that include Beats, Apple and many other household brand names.
PCH International has revenues of over US$1bn a year and masterminds the design, manufacture and distribution of hardware, from the initial online order to the delivery at the customer’s door, anywhere in the world. The company employs 2,800 people worldwide, including 80 people in Cork, where PCH International is headquartered.
In recent years Casey has been a key player in the emerging hardware start-up space, acquiring a design studio called Lime Labs in San Francisco, and establishing his own Highway 1 incubator programme. The company, as well as forging deals with retailers such as RadioShack in the US, has established its own e-commerce site to sell hardware called The Blueprint.
In partnership with Dublin City University, PCH held the inaugural Hardware Hackathon in September and he hopes to hold another hackathon just before next month’s Web Summit in Dublin.
The new age of hardware
Liam Casey: “You have to be protective of the innovators, because that’s where the magic is.”
The very fact that we’re having a conversation in an old newspaper building is a poignant reminder that the world is in flux, industries like the media are dying only to be reborn again.
I ask Casey how countries should be envisioning their industrial future at a time when one of the biggest products in the world has the words ‘Designed in California, Assembled in China’ emblazoned on the back.
“At the end of the day value creation and job creation are really different and when you look at the start-ups that we work with they won’t create thousands of manufacturing jobs but they will create a lot of creative and innovative jobs.
“The work today is associated around a brand. What forms a company today is probably very different to what would form a company in the past. The company in the past had everything in-house – manufacturing, R&D, design, engineering, sales and marketing – whereas you can take out certain functions because you can outsource them
“The parts you do create have to generate value and differentiate you in the market.”
Creating the out of box experience
Everywhere you look in tech today, the beige hardware of the past are now shimmery, elegant pieces of design that sit in our pockets and Apple’s Jony Ive is seen as something of a Messiah saving the world from crimes against design.
When you open a new iPhone or iPad box, every little piece of plastic and cardboard, everything you open and touch has been carefully thought out and orchestrated. It’s an experience.
It’s certainly an experience that is being replicated across the entire IT industry and no doubt Casey and PCH are playing a role in this design revolution.
“That out of box experience is a hugely important part of the consumer experience,” Casey says carefully. “When we work with companies we look for three things: they are passionate about design, they are passionate about brand and they are passionate about the consumer experience.
“That’s a big part of the consumer experience today, a really important part, and it doesn’t matter whether it is a start-up like Drop from Dublin or a big company like Apple or Google, that out of box experience, connecting with a community or consumer is what’s really important.
“It’s about the message you give to the consumer, how you manage that experience is really important and we work with companies that care about that stuff as opposed to some of the big box retailers who don’t care and just want to shift units.”
Tech is the new black
Casey at PCH International's design hub in San Francisco
Casey’s respect for aesthetic values comes from his time when he worked in the fashion business with Club Tricot.
“The fabrics of technology have changed a lot, I was in the fashion industry I could go to a fabric mill and buy 60 metres of fabric and take it to a contract manufacturer. At the last minute I could change what I want to make – the design, with that fabric you could make a suit, a shirt, a pair of trousers, you can make anything from it.
“But in the tech space it was very different, you had technology roadmaps, product roadmaps, so it was a very hard adjustment, you had to wait a long time to open tools and write the software.”
But that is changing thanks to open source technologies and 3D printers.
“And this is probably what pushed us to look at how can we support start-ups because we saw the engineers really hacking with Arduino and Raspberry Pi boards and Linux software, and Android and then you had 3D printing.
“So now you have the fabrics that make up technology that allows you to be creative and go to a hackathon like we had in Dublin recently where you can actually over a short space of time have an end-to-end finished product. Hackathons drive creativity and that’s why we’re so supportive of them.”
I ask Casey what motivated him to buy Lime Labs and establish the Highway 1 incubator.
“For me San Francisco and Silicon Valley in general is where a lot of the technology creativity is and you have phenomenal history here of building great tech companies.
“It is where you get some of the smartest people that are now curious about hardware.
“At the end of the day a smartphone or a tablet: that’s just great software in a box.
“It’s an experience for the consumer and for us when we work with the start-ups they have to be great at that software experience and user interface. It’s so important.
“This is where you get the best people in that space. They have an understanding of the whole consumer products space so it’s an exciting time here; there’s great engineering talent available in the city and the city is a natural draw for people in the tech world.”
Geography is history
Designing the future – entrepreneurs going through a hardware bootcamp at Highway 1 in San Francisco
I ask him if the model is exportable to Ireland and I get a stock Liam Casey answer: “In business, geography is history. You can do this anywhere.
“But for us San Francisco is basically a real hub for hardware technology companies and just look at the big events in technology in the last year – whether its Nest being bought by Google, GoPro going public, Oculus Rift being bought by Facebook, Beats being bought by Apple – these are all happening here in Silicon Valley, this is where the action is. You’ve got to be here.
“When people talk about great hardware in San Francisco and they don’t have the infrastructure to make it they will talk to PCH. They now have a shop window here that they can come to and every week now there is meeting after meeting of companies who want to build great hardware.”
I put it to Casey that this current time can be described as a renaissance for manufacturing and hardware.
“We think there is a renaissance in hardware for sure and a renaissance in prototyping. The manufacturing is still hard, but it is possible. The big risk for retailers is inventory; will they end up holding too much inventory and so we try and shorten that chain and be as lean as possible.
“We are taking products to Radioshack stores, for example, in less than five and a half days and we have created very user-friendly terms with Radioshack to work with the start-ups to make it easier for the start-ups to actually go to market faster. This is vital because in order for the start-ups to be able to reach out to the investment community to invest we had to reduce the risk quite a lot.”
The new industrial age
So I ask him, are we in a new industrial age? “I think it is. When you look back on this time, someone will, and they will say ‘wow there was a lot of activity and a lot of creativity and new ways of building companies and bringing products to market.’”
For Ireland, which missed the original industrial age but has managed to skillfully place itself at the heart of the information age, the question is really about what kind of jobs will people have in the future. Manufacturing at scale has gone to Asia. Is there something we can learn from PCH’s example?
“At the end of the day everybody bangs on about creativity, innovation, whole ideas, and developing new products. But it is all about the selling really.
“It’s about ability to tell stories, to talk in public. Good presentation skills are so important and just messaging; the ability to tell a story is so important but with a purpose.”
He recalls a Wired magazine conference he attended where a photographer discussed his pictures one by one and had his audience spellbound.
“He brought the photographs to life, you saw things you didn’t notice and it is that ability to be passionate about something. Whether it’s a photo or a product, it’s that ability to bring it to life is what’s important.”
Reinvent, reinvent, reinvent
A hardware entrepreneur at work at Casey's Highway 1 incubator in San Francisco
In terms of future goals for PCH, Casey points out the business reinvents itself on an almost daily basis. “You have to because the industry is moving so fast.
“You can say this is the goal and this is what we’re going for. But you’ve got to continuously reinvent, reinvent, reinvent. Listen to any of the guys here in the Valley who talk about this stuff like Peter Thiel. They’ll tell you you’ve got to be reinventing all the time and if you are not then you are not going to be in business.
“You’ve got to keep going, reinvent, reinvent, reinvent.”
If there is one ambition Casey is passionate about it is protecting start-ups and guiding them from concept to consumer.
“They’ve got to be able to do that in the shortest time possible and control the channel in a way that will ensure they will get better margins and a better return.
“If you can do that then the venture capitalist community will be really interested in that space.”
What Casey means is it is harder for a hardware start-up to get venture backing than it is for a software start-up because of the expenditure required to get a product prototyped and a retail deal in place.
“VCs are worried about the working capital required to scale a hardware company, and what we’re trying to do is reduce the journey from concept to consumer.
“If we can take the risk out of it and create a secure channel for the entrepreneurs, it means they can put the focus back on the creativity.
“You have to be protective of the innovators, because that’s where the magic is.”