The Innovation in Hand
The Hive
It is not about targeting a niche market,
but about creating a new market.
Compared to the transformative innovation most of the tools have undergone during the past centuries, screwdrivers have stayed almost the same since their first invention in the 15th century and the addition of the ratchet screwdriver that was invented only in the 20th century. Moreover, the stark distinction between the electric tool market and the manual tool market has kept the neighboring fields mostly separated until very recently. ‘The Hive’ is an 8 years old manufacturing company that developed their own electric screwdriver which can be charged with a USB port. In the traditionally competitive electric tool market, their product crosses the boundary between electronic and manual tools and is now exporting the product to over 220 countries, marking over 500 thousand sales in 2019.
The packaging of the H400 product (image credit: The Hive instagram account @Hybro_KOREA)During the second talk show as part of the ‘Smart Rookies of Neo Manufacturing’ series of the Sewoon Global Forum 2020, the moderators of the series Prof. Jie-Eun Hwang and Director Daehyuck Choi sat down with Sangmin Lee, the president of ‘The Hive’ to discuss entrepreneurship as a manufacturing firm and the challenges due to COVID19. Sitting at Sangbo Tool shop, located in Euljiro, president Lee shared the story of a 26-years-old architecture school graduate without formal training in electronics or the manufacturing industry, jumping into the with a prototype he fabricated on his own. President Lee attributes the ambitious beginning of ‘The Hive’ to bravery stemming from ignorance. The very first prototype that president Lee brought to the North America trade show in 2011 had no exterior case and was held together with a glue gun. The goal was to test the possibilities of his idea in the largest tool market in the world. In retrospect, he calls it a reckless act to have met the buyers without any formal certificates of the performances. But the positive reactions from the buyers gave him the strength to push forward with the product development.
Learning from senior companies has been provided the most important opportunities for growth to ‘The Hive’. While it may be relatively easy to come up with an idea of a potential product from inconveniences of everyday life, driving the idea into a mass-produce product challenges the entrepreneur constantly along the way. The reason why President Lee started the prototyping in the Cheonggye area is due to the coexistence of manufacturing shops and retail firms that distribute products on a national scale. In fact, the venue where the talk took place, Sangbo Tool Shop, has been distributing the products of ‘The Hive’ and ever since have been playing the role of a mentor offering advice on new product development. Building from his own experiences, he emphasized how building connections between the young companies and the ‘senior’ companies as mentee-mentors generates unique opportunities of learning within the industry.
Scene from the talk - Jie-eun Hwang, Sangmin Lee, and Daehyuck Choi (image: Taxu Lee)As many manufacturing companies have been experiencing disruptions due to COVID19, ‘The Hive’ also had to reinvent the way they conduct business. Pre-COVID19, ‘The Hive’ was planning to establish a factory in Vietnam to maintain competitiveness by reducing the production cost and focusing on outreach to expand to the Asian market. However, the risk of the pandemic forced the company to reconsider this plan and divert the focus on local production even though it may lead to larger production costs. The disruption in the production is still impacting the productivity of the company due to the difficulty around sourcing essential product parts such as small scale DC motors or batteries that were normally imported from China. Especially the relatively small scale of production makes it difficult to create new supply networks with well established local producers of the parts such as LG or Samsung.
‘The Hive’ took two directions to utilize the crisis to work in favor of them. First, they decided to strengthen their local market base despite the relatively small market size within the global market by more actively utilizing crowdfunding platforms and social network systems. These new avenues allow the company to be more closely connected to their end users, which motivates the company staff. These connections also have acted as new sources of inspiration for product development as the company is directly hearing what the customers want. Second, they decided to channel the energy on developing new products and preparing for the world beyond the crisis. The cancellations of global fairs and exhibitions, which president Lee travelled to frequently led to take this time to bring various teams of technology development, marketing, quality control together into a room and plan for future product lineups in a comprehensive manner. While it is still the case that the revenue of the company has dropped in the second quarter due to the pandemic disruption, the young manufacturing company is finding their way to hash the potential risks by calibrating their trajectory and preparing for their next step.
The Friedrich Naumann Foundation co-hosted with the Beta City Center of the University of Seoul the ‘Smart Rookies of Neo Manufacturing’ talk show series as part of the Sewoon Global Forum 2020. The talk was streamed live on Youtube and the recording is available at: https://youtu.be/vLXl71ZYcWk
The next talk is scheduled on August 14th at 3pm, featuring B.A.T., a group of fabricators who develop the middleware to utilize the industrial 6-axis robot arm as a digital production platform. More information can be found on the Sewoon Global Forum 2020 website: https://forum.betacity.center.
