Piper

Piper started as a bet on a simple idea: kids should build their first computer themselves. Co-founder Joel, a former Apple employee with a background in physical and hardware products, was researching how to introduce children to computers while working on a thesis at Stanford. Piper's kit is aimed at ages 7 to 12. Kids complete a full physical assembly, screw in the last screw, power on a Raspberry Pi, and then play a Minecraft adventure story mode.

The company launched a Kickstarter in spring 2015. Tommy Gibbons, a former Goldman Sachs and Fondera employee who joined as the first non-technical hire, described it as one of the most successful Kickstarters of that quarter, raising over $250,000. The team joined 500 Startups in the fall of 2015 and shipped its first products that December. To meet the holiday deadline, the founders assembled boxes themselves in Long Beach, California, supplemented by hired labor. Gibbons recalled that the Craigslist workers were paid about $15 an hour, while the TaskRabbit workers were paid a minimum of about $22, and the Craigslist group went on strike on the first day after comparing pay. Early team members worked for reduced salaries until mid-2016, when Gibbons said he was able to ask for equity and a standard salary after proving his value.

Piper sells each kit for $299. Gibbons said the company had over 4,000 customers since its Christmas launch. Before the holiday season, baseline sales were about 50 units per month. Holiday sales were roughly ten times that, and the company was expecting a similar lift in the 2016 season. Unit economics were discussed on the show: COGS ran about $115 to $150 per unit, implying a gross margin of roughly 60% to 70%. Customer acquisition through Facebook ads ranged from $25 to $65 per customer depending on seasonality. The company was pushing a reseller model, where partners paid Piper about $240 per unit and sold it at $299, with resellers accepting thin margins because kids drag parents into stores to play with the product. Repeat purchases came mostly from relatives buying a second kit for another child.

The biggest advantages were a strong Kickstarter launch, an emotionally appealing product with a clear gift-buying audience, and a built-in word-of-mouth loop through family purchases. The reseller model was seen as a way to reach scale without relying only on paid ads. Piper also built a newsletter list of over 12,000 subscribers and used retargeting, though Gibbons said the team tried not to spam people. The company had only one SKU, which kept the product simple. The main constraint was seasonality: revenue was heavily concentrated in the holiday period, and subscriptions and progress emails were still ideas for the future.

As of the interview, Piper had a team of 10 in San Francisco, had raised over $2 million in its seed round, and had sold more than 4,000 units. Gibbons said the company hoped to exceed 8,000 units sold in the holiday season. The founders were also exploring school implementations, classroom packs, and possible monthly subscriptions.