Successfully Navigating The Hardware Startup Life Cycle

Before immersing into this deep experience and you start working on a new product, find a shady spot and think about your motivations.

Guest Post by Sabrina Sasaki

When I first read articles about how “hardware is hard”, I felt a little bit scared about the industry I was getting into. Understanding some of the issues first timers face when launching a product made me rethink how to support our community of makers from a non-technical perspective.

After many conversations with entrepreneurs building their hardware project, I realised there might be many differences in terms of product, market and consumers, however many other similarities can be considered a common path between startups. And when it comes to the ups and downs of a startup journey, external support may turn this entire experience less hard, depending on when you decide to get support and how willing you are to accept external help.

We can trace parallels between the challenges hardware startups face and a roller coaster experience: in some moments you might be cheerful and excited to reach the top, as in others you’ll be exhausted and stressed after going all the way down.

When riding the hardware startup roller coaster for the first time, most entrepreneurs might be terrified thinking about the hardware startup journey –  and some crazy ones will dive into it anyway. Depending on who you decide to partner with, you’ll see your journey from a different perspective. I hope this step by step can encourage more startups to reach out for qualified support at each step, and learn how important the process is – not only the final results. Buckle your seats and let’s enjoy the journey together!

1) The Way: Why and where do you want to go now?

So you’ve arrived at this great amusement park called startup ecosystem, and many others seem to have arrived earlier than you. This makes you even more desperate to start working on something right away! Your mind is blowing by all possibilities you’re about the enjoy with the goal to “make the world a better place!”

There’s so much going on that you don’t even know where to start from! As you watch the reactions from entrepreneurs around you, in a mixture of euphoria and fear, you observe comments about a few of them getting funded, while others complain about failures. In the end, what calls your attention is the positive voice of the ones who kept smiling, excited to point out how amazing their life is and how much they’ve learnt so far!

Before immersing into this deep experience and you start working on a new product, find a shady spot and think about your motivations.

Where do you want to head now? Considering why you came up with this idea, are you trying to solve a real problem? And does it make sense to build a physical product as part of your solution? (as time goes by, keep those questions in mind)

Also, be honest about your expectations and how willing you are to spend a significant part of your life as a startup entrepreneur. As the DIY movement spread all over the world and set a lower entry level for new inventions to take shape – with 3D printers and laser cutters accessible to different hubs, many startups have been created without a clear value proposition, and that’s what how you can differentiate yourself from hobbyists. What defines a startup is the mindset, since the beginning!

Who should join you from the start: Co-Founders, Family & Friends.

2) Immersion: Are you ready?

You could skip the line of market immersion, taking the shortcut that leads to the entrance gate, as many others have been trying do, although this won’t save you time or money – it’s going to make you even more tired, as queueing is mandatory for the rollercoaster of hardware startups. You should reach the same basic milestones: learn, build, measure. If you skip any part of the process, you might have to step back and start it over anyway: it’s hard to continue the way without some basic iterations done in-house.

All efforts to develop IoT devices can bring effective innovation to the world – and it’s great to see a clear mission driving entrepreneurship. Although ideas need some initial execution and we know that as a hardware entrepreneur, you’re excited to make it happen soon.

Prior to starting your hard work, check if your ticket is still valid today!

Benchmarking should be a continuous activity – by the time you start building something, others might have launched their own solution. Use all the tools you can to track recent industry updates and get involved with stakeholders who know what’s not available yet.

Research other products available in the market that solve the same problem and study not only the good cases but also what’s not working so well. A good exercise would be mapping the potential players who’d be interested to launch something similar to your product.

A key point you must consider is how qualified you are to make the first move. Start after working on your Business Model Canvas, and ask yourself the following questions:

  • How do I create a business with my original idea?
  • Is there any way to partner and benefit other players who’re also trying to solve the same problem?
  • How you can I achieve my goals joining forces with current stakeholders?

There might be a few other startups working on projects that look just like yours. It’s common to hear more about uniqueness in terms of technology, patents, and technical details than real advantages for customers. Showing what your product is made of and how it works doesn’t differentiate your startup if your value proposition isn’t clear yet. Consumers have the option to buy a range of diverse products, and you must acknowledge their current choices before you decide to launch a new option.

You probably will find it harder to get some traction if you’re just trying to work on an invention. The value proposition should be part of your core responsibility from the beginning, otherwise, your project might be like a roller coaster in an endless loop.

Who can join this part with you at this stage: Co-Founders, Angels, Advisors, Incubators.

3) Admission: Bring your team in

You can consider the next steps of your business once you’re confident that your product will solve a real problem in a unique way, for a very specific market with a significant amount of potential customers who are willing to pay for it.

Creating a startup requires a lot of tasks to be achieved on a very tight schedule. No matter how passionate you are about your idea and how qualified you are, you’re not MacGyver: some of the required skills might be harder to assess than you can think. Plus, riding this roller coaster alone can be harder than you’d imagine. If neither your co-founder nor yourself have the specific expertise required, go find the key team members who share the same vision and help save your time by filling in the gaps of your team. Focus on what you’re good at and delegate other activities to the ones you trust. One easier way to understand who you should find is on your Business Model Canvas.

Make sure you can build a qualified team that complements your skills and adds value to the entire process.

Who can join this part with you at this stage: Incubators, Accelerators, Other Startups – part of your community.

4) Starting: Roll up your sleeves and move!

It’s time to start testing if your idea can be minimally executed. Previous hardware expertise in-house is desirable but it’s ok to reach out to the external supporters who can guide you on the way. That’s the best time to reach your minimum viable product (MVP), a.k.a. 0 to 1!

Be aware: there are no miracles – avoid dubious and miraculous promises that attract your team’s goodwill. Real work takes some time, energy and a lot of prototyping!

 In order to get to your “works-like” prototype, you have to consider specific product functionalities. At this stage, your prototype might not be attractive enough to convince investors that you should get funded, but at least it should help to achieve the first series of iterations after your initial work (from concept to proof-of-concept).

Assuming you get to the point where you’re aware of your market opportunities, understand your target needs and validate your working prototype with feedbacks from real users, it’s time to consider your Complete Functional Prototype – the “works like” + “looks like” prototype.

A few startups are trying to make a new product without any hardware knowledge, which can be challenging, as most of the main technical decisions end up with suppliers! Getting initial funding won’t prevent you from making mistakes so it’s better to access support from external specialists for the new things you’re not familiar with.

Most manufacturers will basically follow your directions, so the broader you are on your technical specifications, the higher is the risk that you won’t get what you expect. Unless you want to waste your time, money and energy, it’s better to do your homework well before committing to manufacturing.

Both timeframe and amounts involved working with suppliers require more

planning than expected, so it’s better to guarantee as many iterations as you can prior to this stage. Once you’re in, costs tend to be higher and higher – but you can still avoid headaches that might result from your lack of knowledge partnering with the ones who’ve been there before.

Be careful when believing in promises of extremely cheap work – the shortcut might lead you straight to a dead end.

5) Enjoy the overview: Project Management is your ally!

Anything you get wrong before manufacturing should be easier to fix – after your first batch, the cost of changing your mind might double or triple, depending on how lucky you are! So getting a detailed masterplan considering your fronts of work: “who” – “what” – “when” is a full-time job for your startup who hasn’t got industrial expertise yet.

As long as you’re aware of the risks involved after your choices are made, you can dive in!

Manufacturers might be able to solve some of the technical points startups lack expertise, from design to PCBs, but they’re usually not the most recommended to define your project specifications – there’s a cost involved with their know-how, so it’s easier to have a project manager deal with the details for you, so you don’t have to take care of all the supplier’s requests.

Who can guide you through this stage: Project Managers & Prototype Experts.

6) Loops: Get insights from your community

You must be truly open and flexible to receive feedback about your product and then do something about it. Engage with your target customers, especially the ones who believe in your mission. Turn them into your free ambassadors, people who can help you verbalize your dream and inspire others to follow your vision.

Content is king but earned content (what others talk about you) is a key metric for your success – fans can add their own perceptions about your offer – check this Nielsen report to understand some factors that might affect consumer’s decisions.

Real engagement involves more than the traditional approach for PR/Marketing + customer service, and you shouldn’t ignore your target signs – as a startup, part of your work is to solve your target’s real problem.

In general, consumers won’t buy products considering the Bill of Materials, patents, mechanics, PCB, or any parts used. If those are the only things you’re concerned about, you must rethink the value you will bring to your project.

Who can guide you at this stage: Family & Friends, Early Adopters, Key Influencers.

7) Steep Slope: Take a deep breath and hold tied!

Funding is usually a nightmare for startups, especially when basic support is needed to have a consistent proof-of-concept that will actually convince investors to invest.  The amounts requested to reach a good prototype are even higher for hardware startups – the rounds of iterations for a physical product take longer and involve external partners, compared to a software startup! Some promising projects don’t even make it to the small lot production, as they tend to get stuck in the beginning due to lack of funds. If you really believe in what you’re doing, keeping focused and don’t waste your time with the ones who don’t share your vision.

Who can join this part with you at this stage: Angel Investors, Accelerators & VCs. Get personal recommendations from other startups.

8) Tight Turns: Iteration is a key point for your team

Even when mechanics, electronics and software work perfectly, it might be the case that your users can’t get it in the same way you’ve planned. Never underestimate your target and pay attention to their responses. Blaming customers for your lack of validation doesn’t save your business! The main advantage of rapid prototyping is giving you the chance to refine your product before mass production.

You should be able to understand your target’s needs for the specific problem you’re trying to solve – giving this task to outsiders will keep you away from your goals and start a never-ending loop of batches full of rework.

9) Downhill: Double check if your belt is buckled

If the roller coaster stops and you’re asked to pay more than agreed, be brave and make the best decision for your startup – even if it means jumping out. In the end of the process, you might join forces with other visionaries and take a new path together. Everyone you’ve met can be somehow touched by your goals and could possibly decide to start it over supporting your new project.

10) The End: Time to go home!

Game over! Move on. You’ve prototyped quite a few times to iterate your product, DFM has been part of your plan to optimize your work and you’ve saved time and money before committing to mass manufacturing. Even after trying hard, many times, there is a still a chance you might fail and that’s totally fine!

There are many possible ways to get off the roller coaster, and the most common for a hardware startup is quitting before wasting more resources on a product that can’t find a current market fit. Chances are: if your IoT product does not have enough traction to attract investors, there are still lessons to be learnt on the way – some startups realise a physical product might not be the best answer for the solution they’re trying to build, so they decide to stick to a software solution instead. What some might seen as a failure for an early stage startup is considered basically a learning process – the outcome is that you’ll be more prepared for the next challenges and saved a lot of money just by the fact you avoided burning someone else’s money with a minimum order (mass manufacturing)

11. Buy an extra ticket and ride again

After your first experience, trying a new startup sounds crazily addictive – and many serial-entrepreneurs have done it continuously. You might be one of them – or NOT!

So if changing paths and starting a new startups is your plan, go back to the entrance and start it over, using all lessons learnt – but keep in mind, each project needs to be constantly iterated.

12. Call for support

For every step of your journey, it’s better to get support than trying to do everything alone – the DIY mindset is not necessarily the most cost-effective solution for yourself. Overwork can lead to a series of physical and mental health issues, so learning how to share your responsibilities with others can always be a great way to face your problems – from the start.

13. Share your expertise

The most exciting part of going through such an experience as a hardware startup is being able to share with others what you’ve learnt so far. There’re many entrepreneurs who might need some basic advice about something you’ve experienced and you could be able to provide real advice!  It’s important to have a truly collaborative attitude towards other startups, as in the end of the day, we’re all on the same roller coaster.

As long as you are aware of who you can reach out to in each stage of your journey as a hardware startup, the entire experience will be still very challenging but less painful for your team.

If you’d like to learn more about how Prototype Experts and Project Managers can help you in this rollercoaster journey, write me here: sabrina@makersboot.camp 

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