Helping a smartphone startup secure better manufacturing terms

The founders of SLEKE, who sell a distraction-free phone built on refurbished Google Pixels, asked us to help build the hardware supply chain for a side company of theirs, a compact and premium smartphone with a minimalist user experience. They came to us shortly before signing with a manufacturer they had met at an industry event, without having compared any other factory, so we recommended comparing options in person first, and over the following month we found four more suitable manufacturers and got them interested, which was not easy as an early-stage startup cannot promise the steady volumes factories prefer.

When the two founders arrived in Shenzhen we took them to five factories across Guangdong in four days, and the factories differed on development fees, minimum order quantities, product experience, technical capability and timelines, we also helped them refine the specifications and weigh up the chipset and connectivity options. Two factories stood out, and having a credible alternative gave the founders a stronger position with their original contact, who improved the terms and was chosen in the end.

In the week after the visits our legal team helped rework the payment milestones and the one-sided clauses in the contract, and our financial model showed the project would need more capital than expected, which helped the founders plan how to fund development and launch. The manufacturing agreement is now signed, development is underway and they have a first sample as they prepare their Kickstarter campaign.