Why to start your hardware startup now

 

With many new technologies and advancements that have happened in recent years, it has never been a better time to start your own company and take a product to market. You’ve got an idea for a kitchen gadget or IOT device, now what? Having a clear understanding each stage of the building process, the resources and macro factors upfront will make going from prototype to product easier than ever.

 

Ideation / Initial Design

You have your idea. It might be a sketch you have in a notebook or in your head. The first step is to get a formal design of your product. In the past, you had to purchase expensive engineering software to be able to create the necessary CAD files needed to create the product. That has all changed. Now there are many cheap/free CAD software options available to help you with your design. One of the newer and more exciting offerings is by Onshape. From the same people that started SolidWorks, one of the leading professional CAD programs, comes a fully cloud based modeling platform. And best yet, it is free for public designs and reasonable price for the professional version.

 

Prototyping

Now that you have designed your product and ready to show that it works, you need to build your first prototype. Many rapid prototyping companies and products have been introduced. If you wish to outsource prototyping productions, there are companies such as Proto Labs, Fathom and Quickparts waiting to help you. Prototype options include 3D Printing, CNC machining and even injection molding at much cheaper prices than have been available before. If you need many iterations of smaller product, it might be worth investing in one of the new economy 3D printers that have been introduced in the past few years.

 

Product Development

Your idea is cool. It works. You think the world wants it. Time to start the development state. Unfortunately, the development state is where the costs begin to add up. Unless you have very deep pockets yourself, this is where it is time to start looking for outside investments. The Internet comes to the rescue. Crowdfunding sites have been popping up being led by Kickstarter and Indiegogo. Through these sites you get to solve two problems at once, fund your development and test the market to see if people actually want your product. Each crowdfunding site has its own caveats so make sure the pick the one that best fits your product.

 

In addition to crowdfunding websites, there are accelerators and incubators that are focused on hardware. Bolt and Lemnos Labs are dedicated to hardware startups where Greentown Labs is a bit more specific with a focus on clean tech companies.

 

Production

This is one of the most important stages for the company. In many cases, this is the first stage that requires a large investment. No longer are you just making 5 or 10 of your product. It is time to scale up to meet the growing demand. In this stage you are; signing contracts with manufacturing companies, committing to minimum number of devices, buying raw components, making molds and getting assembly lines up and running.

 

Choosing the right partners for manufacturing is critical to the success of your venture. A great vendor helps you get the product to market faster with fewer hiccups. A bad vendor can cause massive delays, cost overruns and even sink the company. Luckily, once again, the Internet has new solutions to help. It used to be that tradeshows, word of mouth and online listing websites were main options for vendor sourcing. Now websites have sprouted that help find the best manufacturers and other vendors for your project based on reviews. This helps de-risk and streamline the vendor sourcing process and saves money and time.

 

 Marketing and Sales

Getting your product into a brick and mortar store has always been a challenge. Luckily, this is no longer the only outlet for sales. You own website can be a huge source of revenue and many other online portals continue to pop up as options. Many daily deal websites are looking for the next cool item to have on their site. Most recently Amazon got into the game. They just announced Amazon Launchpad targeting “cutting-edge products from startups.” What better way to ramp up sales than to lever Amazon’s network of customer and fulfillment infrastructure.

 

Scaling

Website startups have been the darling of many top tier VC for a while but this has changed. With the high profile exits of Beats (Acq Apple), GoPro (IPO), Fitbit (IPO), Nest (Acq Google) among others, VCs are taking notice of hardware startups again. In 2014, VC’s invested $2.6B in electronic and computer hardware startups. That was the most invested in a single year for hardware startups surpassing the previous high in 2000. Some recent startup funding news seems to point that this is continuing in 2015 with Light raising $25M and Olio raising $10M in the past week.

 

So all you drone makers rejoice along with all of the other hardware startups. You are riding the wave of innovation at the right time. If you have an idea and haven’t taken the plunge yet, now is better than ever to jump into the deep end and start swimming.

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