LittleBits was overwhelmed by demand in its early days--you sold out of your products in your first two weeks. How did you recover?

I considered hiring a team in China to run our manufacturing operation. But if you expand to China, it
becomes a matter of running two companies at once, with two offices and two teams doing quality control. I found a supply-chain partner here instead, to negotiate with manufacturers and suppliers. And so we pay an extra fee, and we give up some equity, but it’s well worth it.

So should more manufacturing come back to America?

Trying to compete to make little plastic pieces cheaper here than in China--that ship has sailed. And, to be honest, it’s not that interesting. There’s a real resurgence of personal manufacturing here, and of high-end manufacturing of complex devices. I think that’s where the U.S. can really stand out.

How do you decide which opportunities to pursue--or to pass up?

A lot of people in the toy industry gravitated toward us initially. It was great, except the buyers pressured us to drop our prices. But these are electronics, and they’re complex and expensive to make. To make something cheaper, you have to really reduce the functionality. We did a $29 kit to try that out--and it did very badly. People wanted to do more with the bits, instead of getting dumbed-down products.

You moved here from Lebanon to attend MIT. Are changes in immigration policy affecting littleBits?

I’m on an artist’s visa now, and there was a period when I thought I was going to get kicked out of the country, despite having 45 employees. And I had to think about moving littleBits, even though I love New York. We have a lot of really talented foreign students coming out of our schools whom we can’t employ, because they can’t get visas. At least if there were more postgrad visas, people could stay a few years to prove themselves, and I think that would be very valuable.

From the May 2015 issue of Inc. magazine