I suspect the answer to "will people pay ~$100 for a washed out colour photo frame that is slightly less inconvenient than normal LCD digital photo frames" is "no", but you're welcome to try.
I used to work for a consultancy that did hardware product prototyping as a design service. We were good and very wide ranging but not at all cheap. The cheap DIY end is probably covered by the maker/hackerspace/arduino/rasberrypi movement which has evolved from the older ham/model railway ecosystem.
Another wrinkle is that if you want to sell electronic goods you need to consider FCC/CE/UL certifications, and there is no minimum quantity for the rules to apply. That increases the cost of the MVP greatly.
Once your idea has been validated with potential customers, then you start designing. If you will have low sales numbers (ie: 10k or less/year) then look for having high value and high margins (few hundred dollar price and 50% gross margins). If you will have high sales numbers (100k+ or 1M+ per year) then you can get down below the $100 price point and lower your margins somewhat (but I suggest staying above 25% gross margin).
Expect that your BOM (bill of materials) for the electronics parts, when priced at your yearly volume pricing, will be 1/3 of the cost of your product. Then add your margin to get the sale price. If you're selling retail, account for 25-50% margin for the retailers in addition to your margin (so customer may pay 3x what it costs you to build the product for).
Regarding eInk screens, going to large sizes (ie: Kindle DX range) is going to cost you a lot for the screen. Assume Amazon make very little profit on Kindle devices and you're in the ball park for how much their BOM costs them. Your competition for electronic picture frames are under $100 sale price retail, so I suggest you focus on differentiation so that customers aren't comparing your product to the <$100 picture frames if you want to be successful.
In any case, I did find value in his lecture and thought process around treating everything as a system (instead of looking at hardware, software, data all discretely). I've tried to capture my takeaways via publishing 22 Quotes that I took away from the lecture here: https://medium.com/@RajenSanghvi/22-quotes-from-hosain-rahma...
To him, everything is a system; apparently even if he were making a five prong garden weeder, a snow shovel, or a tennis ball, he'd find a way to make it better by regarding it as a system.
Gave good insight into all the work involved. Good lecture. Likely amazing products.
One of the best people Sam put in front of the class.
Until Startup School, I had no idea that the ideas for Jawbone date back to 1997, the company launched in '99, and over the last 15 years their team have endured some pretty crazy highs and lows - including Jawbone getting shut down and the team being locked out of their own offices by the board in the mid 2000s.
Video here:
