[hansc]

It is certainly true that you can spend this amount of money on a product and not make money on the first 5000 product run.

But it is certainly possible to make money on such a first batch: Why do you need inhouse EE, ME, DE en Embedded Engeneer for a headphone. Many of these functions can be done by a small design firm or freelancer that you hire for a much smaller fee. In addition, these people do this all the time for different companies and have a huge experience this way and good contats (you can also go with teh bigger firms, but then you probably need the same amount of money).

[Thimothy]

So... You are a hardware start-up that doesn't actually do any hardware. I recall a guy who got seriously burnt by taking this approach in a kickstarter: he had designed a iPad cover, successfully funded it and then proceed to crash as all his supply chain decided that wanted a bigger slice of that money. He even got sued by some random backer.

I think you really need some expertise in what you are trying to build. It has to be really hard doing a decent cost estimation otherwise.