Tive’s China Manufacturing Strategy: 8 Factories, One Goal—Sub-$30 Hardware That Makes Money

Tive’s China Manufacturing Strategy: 8 Factories, One Goal—Sub-$30 Hardware That Makes Money

The math was unforgiving. Tive’s reusable $250 tracker wasn’t scaling because customers couldn’t handle the reverse logistics. The solution—disposable trackers—seemed obvious. But the economics looked impossible.

To sell a disposable tracker for $40-60 and maintain healthy margins, Krenar Komoni needed manufacturing costs around $30 or less. Everyone in hardware told him the same thing: you can’t build GPS trackers with cellular connectivity and sensors for that price. Not with the quality and reliability supply chain customers demand.

Krenar had heard “impossible” before. He booked flights to China.

In a recent episode of Category Visionaries, Krenar shared how he and his VP of technology visited eight manufacturing facilities across Shanghai, Shenzhen, and Guangdong to crack the economics that would transform Tive from a struggling startup into a company that’s shipped over 1.5 million trackers. The lesson for hardware founders: sometimes you need to get on a plane and solve impossible problems in person.

Why Email Wasn’t Going to Cut It

Most founders approach manufacturing partnerships through intermediaries—sourcing agents, trade show connections, or Alibaba conversations. Krenar needed something different. He wasn’t just looking for cheap production; he needed manufacturers who could iterate with a startup.

“We figured out who can make cost effective trackers for us, but most importantly, who can listen to us, because we have the ideas, we have the way on how we want to build this, how we want to design it. What’s important, we don’t want to just buy something that doesn’t work for our customers,” Krenar explains.

That second criterion—finding partners who would listen—couldn’t be evaluated over email. Manufacturing facilities that work with Apple or Samsung operate differently than those willing to collaborate with a cash-strapped startup that needs to change specifications based on customer feedback. Krenar needed to meet people, tour facilities, and assess whether potential partners could move at startup speed.

The Constraint That Forced Innovation

The target economics weren’t arbitrary. They emerged directly from Tive’s near-death experience in 2018. After laying off half the company to extend runway from three to nine months, Krenar had learned through hundreds of cold calls that customers needed disposable trackers. But he had zero margin for error.

“I couldn’t afford that because I had no money left. So I had to make money first, like over the first sale,” Krenar notes. No venture-backed hardware company playbook of losing money on early units to scale later. No subsidy period while proving unit economics. First-sale profitability or the company dies.

That constraint meant the manufacturing cost target wasn’t flexible. At $40-60 retail pricing, manufacturing costs above $30 would kill margins. Below $30 created breathing room for logistics, customer support, and platform costs while maintaining profitability. The math was binary.

What Eight Factory Visits Actually Taught Them

Krenar and his VP of technology, Martin, didn’t just visit facilities—they evaluated entire manufacturing philosophies. Large facilities optimized for volume production of standardized components couldn’t accommodate the iteration speed Tive needed. Facilities specializing in ultra-cheap consumer electronics couldn’t hit the quality standards supply chain customers required.

The challenge was finding the intersection: “We figured out that intersection between cost and I would say, empathy with the manufacturer,” Krenar explains. Empathy meant manufacturers who understood that Tive’s specifications would evolve as they learned from customer deployments. It meant partners willing to discuss design trade-offs rather than just executing orders.

That quality—manufacturing empathy—only became apparent through in-person conversations. You can’t assess a partner’s willingness to collaborate through an RFQ process. You need to tour the facility, meet the engineers, understand their other clients, and gauge whether they see your success as connected to theirs.

The Technical Complexity Nobody Sees

Building a sub-$30 GPS tracker with cellular connectivity, temperature sensing, and year-plus battery life requires ruthless trade-off management. Every component decision affects three variables: cost, performance, and reliability. Optimize too much for any one variable and the others collapse.

The cellular modem needed global connectivity but couldn’t drain the battery. The GPS chip needed accuracy but had to be cost-effective at scale. The temperature sensor needed precision for pharmaceutical shipments but couldn’t add significant bill-of-materials cost. The battery needed longevity but couldn’t make the device too large or heavy.

These weren’t problems Tive could solve alone in a lab. They required manufacturing partners who understood the constraints and could suggest component alternatives, assembly optimizations, and design modifications that preserved performance while hitting cost targets. “We have the ideas, we have the way on how we want to build this, how we want to design it,” Krenar says, but implementing those ideas required partners who brought their own manufacturing expertise to the collaboration.

Why Geography Still Matters in Hardware

The China trips weren’t just about finding cheap labor—they were about accessing a manufacturing ecosystem that doesn’t exist elsewhere. Shenzhen alone concentrates more electronics manufacturing expertise, component suppliers, and iteration speed than perhaps any region on earth.

When Tive needed to test a different battery configuration, the component supplier was in the same city as the manufacturer. When they wanted to evaluate alternative cellular modules, they could visit multiple suppliers in a single day. When assembly issues emerged, they could be on-site working through solutions rather than coordinating through email across time zones.

This geographic advantage compounds when you’re optimizing for cost. A $2 component in the US might have a $0.50 alternative in Shenzhen that performs nearly as well for Tive’s use case. But discovering that alternative requires being embedded in the ecosystem where engineers know which suppliers make which components and can facilitate introductions.

The Outcome: First-Sale Profitability

By January 2020, Tive released the world’s first single-use 5G-ready tracker. The manufacturing costs hit their targets. The product could be sold for $40-60 with healthy margins. More importantly, customers could finally adopt the technology at scale because the disposable model eliminated reverse logistics friction.

“I think that’s one of the things that just people think things are impossible. You just, I guess, get on a plane and go actually figure it out on your own,” Krenar reflects. The casual phrasing masks the significance: most founders facing “impossible” economics would have given up or tried to raise more money to subsidize negative unit economics.

Krenar got on a plane instead.

The Principle for Hardware Founders

The broader lesson isn’t “go visit Chinese factories.” It’s about which problems require in-person problem-solving versus remote coordination. Manufacturing partnerships—especially for hardware startups needing to balance cost, quality, and iteration speed—fall into the former category.

Email works for placing orders with established processes. It doesn’t work for finding partners willing to collaborate on solving seemingly impossible economic constraints. That requires evaluating intangibles: Do they understand your market? Can they move at your speed? Will they suggest improvements rather than just execute specs? Do they see your growth as benefiting them?

Those questions require conversations, facility tours, and meeting the engineers who’ll actually build your product. They require understanding the broader manufacturing ecosystem in regions like Shenzhen where component proximity and supplier density create compounding advantages.

Today, Tive has shipped over 1.5 million trackers and is preparing for an IPO. The company sells devices for tracking strawberries, rocket parts, and pharmaceuticals across 700 customers globally. None of it would scale without manufacturing partnerships that deliver sub-$30 production costs while maintaining the quality standards supply chain customers require.

Sometimes the difference between impossible and inevitable is just a plane ticket.