Running a Hardware Company

This is a question directed at Chris Anderson, which I wanted to ask him in his Reddit AMA, but I missed it. However, I'd welcome the views of others as well:

I saw Chris speak at Maker Faire New York. One of the things he said about his decision to manufacture in the US and Mexico is it allowed for much more rapid innovation and iteration. While those are generally good things, in hardware you can't push out a free or low cost update the way you can with software. With rapid hardware iterations, you run the risk of annoying customers who purchase something, only to have a better and/or cheaper version come out very shortly after. While this has always been the case with computers, mobile phones, etc, those items had longer, and more predictable iteration cycles.

So, the question is, how do you balance rapid iteration with customer satisfaction?

David: Thanks for raising this important subject. I agree that it's a balancing act and can be an issue if hardware innovation happens too fast, or if backwards compatibility is too often sacrificed. Here are a few examples of how we try to minimize the impact.

Backwards comparability: We try to maintain that as much as possible, although there are limits. For instance, after we retired the old APM 1280, back in Jan 2010, we promised to keep the code compatible with it for a year. In fact, we ended up being able to support it for more than two years officially, and even now it's possible to use the current code on those old boards if you compile it yourself and turn of some memory-using options. We also discounted the APM 2560 base board so people could more easily upgrade to the current version without having to replace their entire APM 1.
Evolving to more paced upgrades: In the early days, we were iterating the basic products very fast as we came up the learning curve. Now we're on a 6-month incremental upgrade (2.0 to 2.5, no major feature changes) and one-year major upgrade (2.x to 3.x) cycle.
Keeping most innovation opaque to the users. Some of our board designs change every month in small ways to improve production processes, from switching to an easier-to-find components or rerouting traces to improve yield or diminish noise. These changes mostly just make the boards more reliable or cheaper to make, but should have no consumer impact. So although we're innovating fast, customers don't have to worry about it.

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3D Robotics
Chris Anderson December 13, 2012 at 9:57pm
David: Thanks for raising this important subject. I agree that it's a balancing act and can be an issue if hardware innovation happens too fast, or if backwards compatibility is too often sacrificed. Here are a few examples of how we try to minimize the impact.
- Backwards comparability: We try to maintain that as much as possible, although there are limits. For instance, after we retired the old APM 1280, back in Jan 2010, we promised to keep the code compatible with it for a year. In fact, we ended up being able to support it for more than two years officially, and even now it's possible to use the current code on those old boards if you compile it yourself and turn of some memory-using options. We also discounted the APM 2560 base board so people could more easily upgrade to the current version without having to replace their entire APM 1.
- Evolving to more paced upgrades: In the early days, we were iterating the basic products very fast as we came up the learning curve. Now we're on a 6-month incremental upgrade (2.0 to 2.5, no major feature changes) and one-year major upgrade (2.x to 3.x) cycle.
- Keeping most innovation opaque to the users. Some of our board designs change every month in small ways to improve production processes, from switching to an easier-to-find components or rerouting traces to improve yield or diminish noise. These changes mostly just make the boards more reliable or cheaper to make, but should have no consumer impact. So although we're innovating fast, customers don't have to worry about it.

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Running a Hardware Company

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