If you talked to most business experts, they would probably point to many reasons why Adafruit Industries, an electronics manufacturing and online-learning company based in New York City, should not be as successful as it is. Ask founder Limor Fried, however, and she’d probably point to the same reasons to explain why her company has thrived.
For starters, Limor founded what would become Adafruit almost accidentally. In the early 2000s, she was pursuing a degree in computer science and electrical engineering at MIT, but instead of working on her thesis, she began tinkering on her own personal electronics projects. In the process of building things like her own synthesizer and mp3 player, she started blogging about her progress. Before long, people began reaching out to her to ask if she could sell them a kit so they could make their own version of the same things. So she did. She started small—assembling a hundred kits on her kitchen counter and sending them out to customers—but demand grew and soon she was a CEO. She didn’t have a formal business plan—or any business experience. She grew the company by trusting her instincts and expertise and listening to her customers’ needs.
After she graduated, Limor was offered a fellowship at an art gallery in New York, so she packed up her sensors and circuit boards and moved south. She settled in a one-thousand-square-foot apartment in Queens and started growing Adafruit from there. Eventually, she moved to a new apartment in lower Manhattan, which she said was relatively affordable in the post-9/11 days. Finally, Adafruit needed a proper office space, so Limor moved the company into its current 50,000-square-foot headquarters at 150 Varick Street.
When people discover that Limor runs a manufacturing company in Manhattan, they immediately wonder why she doesn’t move somewhere less expensive. Manhattan, they assume, is for banks, media companies, and the global headquarters of billion-dollar, internationally known brands.
Limor is quick to point out that Hudson Square, the neighborhood where Adafruit resides, was historically a manufacturing and printing hub, so in many ways, her company is helping return the area to its roots. Setting romantic links to the past aside, there are plenty of practical reasons why the location works well. For one, the type of electronics manufacturing the company specializes in requires a high level of skill, something that is much easier to find in a large city like New York than it would be in a relatively less expensive locale. Proximity to several subway lines also makes it convenient for their 100 employees to commute to work, and even though Adafruit manufactures 400-500 products on site, the fact that these products are relatively small—many only a few inches wide—means they don’t require a large footprint.
A DIY aesthetic pervades the company’s structure, not just in terms of its history and the products it sells, but also in the way it has grown. In the fifteen years Adafruit has existed, Limor has consistently rejected outside funding. Given the company’s track record—it generated roughly $40 million in online sales last year—VCs and other would-be investors have made Limor several offers, but Limor never wanted to risk the company’s long-term well-being for the sake of fast growth.
“When I was younger, I did see a lot of my friends form companies, take funding, and then really terrible things happened afterwards,” Limor says. “Like really tragic friendship-breaking experiences that occurred, which, you know, from a business perspective are like, ‘Yeah, that’s what it is. Sorry your friend who co-founded it sucks. He’s fired.’”
Limor says she’s not against outside financing in general, but she wanted to see how far she could get without it. She says the decision forced her to be strategic in order to remain profitable. One way she’s helped her company stay competitive is by using Gravity to process online payments. Early in the company’s history, Limor realized that, by switching to Gravity’s percentage-plus fee model, she could save tens of thousands of dollars per year. “We’ve been using Gravity for over ten years, and we do get courted by other merchant services companies because we do a large volume,” Limor says. “But nobody’s been willing to even match the percentage-plus rate that Gravity has. We’re open. We’ll just say, ‘Hey, could you at least match it?’ And they’re like, ‘No, we can’t even match it. We just don’t do that kind of pricing.’ Because they would prefer to have an inflated price.”
Adafruit’s independence has allowed Limor to create a company she believes in. “There’s a lot of things that we do that I think VCs or investors would say, ‘Well, it doesn’t make sense for you do a kids’ show.’ But we personally want to do it. Or they were decisions that would allow for long-term survival of the company even at the cost of short-term gains.”
Limor acknowledges that many other business owners might choose to do things differently, but she rejects the notion that there’s one right way to do business. “I remember reading something somewhere that said there are only two things you have to do in a business: run your payroll and pay your taxes. Everything else is completely up to you.”
This freedom has allowed Limor and the rest of the team at Adafruit to focus on the thing that is most responsible for the company’s success—its community. Adafruit, which is named after programming pioneer Ada Lovelace, is, at its core, a community by makers for makers. “Our core value is to show people how much fun it is to become an engineer and build things using electronics,” Limor (also known as “Lady Ada” among Adafruit customers) says.
Via its online store, the company sells approximately 4,000 products, roughly 500 of which are made in house. They also offer free online tutorials on everything from what a capacitor is to how to use and maintain a laser cutter, as well as open-sourced guides to building new and exciting products like a 3D-printed Apple Airplay boombox. There’s also a strong community of sharing and learning, and the company hosts several regular programs, like a weekly show-and-tell every Wednesday, in which community members can share what they’re working on, get feedback, and ask for help.
While Adafruit caters to makers at every level of expertise, Limor says there is a special emphasis on those who are just starting to learn about electronics. “People are beginners in different things. People are experts in different things,” she says. “So as long as you provide a good solid base of understanding for people who are beginning in a topic, you can quickly reach up to the expert level by building on top of it. It’s much harder if you focus only on the experts to then have something for beginners, and that’s a common failure with people. You know, they go for the expert only, and then they can’t go down to a beginner because they’re so used to this high level of documentation or service and support. But we’ve always focused on the beginner. There are always more beginners. There are always more people who have never even heard of or done the thing that you’re trying to introduce them to.”
This commitment to helping beginners makes Adafruit especially popular with teachers and students. In fact, the idea for Adafruit’s most popular product came from talking to teachers who were looking for an inexpensive but effective way to teach their students about programming and electronics. “Teachers, and parents, and even students were coming to us and saying, ‘We want to learn Internet of Things. We want to learn physical computing. We want to learn electronics and programming, but everything in the market right now is at least $75. And that means that we can’t get it to every student in a classroom. We just can’t afford it. We can buy one kit for every ten students, but then the problem is that only one of those students really learns it. Everybody else watches but they don’t actually get to learn by doing.’”
The result, Circuit Playground, is a small circular circuit board featuring several components, like a light sensor, thermometer, speaker, and infrared receiver and transmitter that users can program using one of several programming languages—from basic to advanced—to do all sorts of nifty things. Users have used the Circuit Playground to make everything from light-up jewelry to cosplay props to remote controls. At just $25, it’s a lot more accessible than previous kits on the market.
Listening to the community in this way helps keep Adafruit relevant and nimble. Recently, Limor says, they began working with people in the assistive-device field to help create new technologies that can help people with disabilities. In the past few months, they also shifted a portion of their manufacturing to produce personal protective equipment, such as masks and sensors for ventilators, for nearby hospitals and businesses after the coronavirus outbreak left many of their neighbors ill prepared. Limor says she anticipates this being a focus of the company for at least the next several months as NYC businesses begin to reopen. Even so, Adafruit will continue to serve its core community the way that it always has.
“People will still need to learn STEM and they’ll want to do projects at home and what’s really neat is all of the Adafruit tutorials have always been online,” Limor says. “We’ve always been a worldwide community and so in some ways, we haven’t had to adapt that much.”
By Brooke Carey, Lead Storyteller
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Photos courtesy of Adafruit Industries