8 Essential Tips for Hardware Startup Success

Published on by John Teel

It’s a long, rough, expensive journey to take a hardware product from idea to market. That journey becomes even longer, rougher, and more expensive when you end up taking the wrong path.

So I want to share eight tips with you that will speed up your journey and make it a bit easier and less expensive too. These tips will help keep you on the right path to success.

Failure to follow these tips will likely mean failure for your startup, so I suggest you read through each one very carefully, and implement these tips as soon as possible.

NOTE: This is a long, very detailed article so here's a free PDF version of it for easy reading and future reference.

 

#1 – Don’t underestimate your product development

Product development will nearly always take more time than you expect. If you’ve never developed a product before (or managed the development of one) then it will likely take you many times longer than what you think.

But, even if you have developed products previously, it will still probably take longer than you expect. Sure, your initial estimate will be more accurate than those from someone doing it for the first time, but it will still likely be too optimistic.

When I was a chip designer at Texas Instruments I can think of only maybe one time I ever heard about a project completing ahead of schedule. And only a handful of times where I knew of projects completing on time. The vast majority were running behind schedule.

TI develops a lot of chips and has decades of experience (they did invent the integrated circuit after all!), but even they always struggled to estimate development time accurately. They weren’t an exception, and that is the norm when it comes to creating something complex that is totally new.

No doubt about it, hardware development is complex and somewhat unpredictable – so plan for it.

Part of this has to do with the inevitable debugging process involved with hardware development. Of course any problems that you encounter during development are by nature somewhat unexpected, otherwise you would not have allowed them to exist in the first place.

These unexpected issues are normal and will certainly arise. Unfortunately, they are hard to forecast because of their unknown nature.

Debugging unexpected problems is where a project can really fall behind schedule. Since you don’t even know what the problem may be, how can you know how long it will take to figure it out?

The best you can do is to expect and plan for the debugging process, and to not be overly optimistic in your expectations. Regardless of your experience level, you are going to encounter surprise challenges. But creating something brand new is never simple, is it?

#2 – Plan for the complexity of scaling up manufacturing

A frequently neglected step in launching a new hardware product is scaling from the prototyping stage to mass manufacturing. Scaling up to mass manufacturing your product is costly, time consuming and complex.

Although development time is almost always underestimated, the time to scale up is many times totally left out of the equation. Thinking that you can just jump right from a prototype to full production is a common misconception.

But, making one (or two or three) of something is entirely different than making thousands, or millions of them. It is common for this scaling process to take just as long as it took to get to a final prototype, some times even longer.

This is why it is very helpful to design your product from the very beginning with manufacturing in mind. You can really save both money and time if your product design takes into account the manufacturing process in the very early stages of product development.

In many ways, the plastic enclosure for your product will be more complex to scale to mass manufacturing than the electronics.

This is because the technology (3D printing, CNC machining, vacuum casting) that you used for your prototype is a totally different process than the injection molding technology used in mass manufacturing plastic parts.

It’s not uncommon for a startup to discover after they think they have a final prototype, that they need to make major changes to their enclosure design because they didn’t consider injection molding from the start.

You should adhere to the strict design rules for injection molding in your enclosure design even though its not necessary when prototyping. Although, there are some injection molding rules (such as something called draft) that are usually best left out of the design until very late in the process.

#3 – Conduct rigorous quality control testing before shipping

Who can forget the news coverage showing Samsung’s Galaxy Note 7 phones spontaneously bursting into flames, burning users, and even triggering flight bans.

Its hard to imagine worse publicity than injuring your customers and having your product banned from use during air travel.

After this debacle, Samsung re-examined the Galaxy Note 7. They determined that the two sets of batteries in the device had “significant design flaws”.

They stated that one battery had “an electrode deflection” that caused overheating. The second battery had “an abnormal weld spot” which caused an internal short circuit.

Including the recall of all Galaxy Note 7 phones, it was estimated that Samsung lost $5 billion from these design mistakes.

It highlights how important quality control testing can be (and how dangerous lithium batteries can be). If normal use caused the Note 7 to catch on fire, why wasn’t this mistake caught during product testing?

I suspect the answer lies in the fact that quality-control shortcuts were taken in an effort to get to market faster.

If you have put all this effort and money into developing your market, don’t ruin it by shipping defective products to customers.

Always err on the side of having too much quality control testing during the beginning stages of manufacturing. Don’t sacrifice this even if it kills your initial profits.

Finally, be sure to meticulously triple check any sample units going to important retailers or reviewers.

#4 – Avoid feature creep / Focus on MVP

Feature creep is the term used when a developer keeps adding more and more features into a product in an effort to make it better or to appeal to a larger demographic.

Although lots of features may sound cool and appealing, resist the urge to add every conceivable feature to your product.

I’m a big proponent of doing the opposite by following the Minimum Viable Product (MVP) method, which has a lot of benefits like gathering real user feedback as soon as possible.

The MVP method entails developing the simplest possible version of your product. Only include the very core features of your product. Then add any new features based on the feedback from your MVP customers.

#5 – Don’t overpromise to your customers

There’s nothing worse than running a successful crowdfunding campaign, and then failing to deliver your product as promised. But many campaigns have ended up this way.

In fact, Kickstarter hired independent researchers to analyze their crowdfunding results. They found that 9% of campaigns failed to deliver at all and that 35% didn’t deliver on time. Those are somewhat generic stats though and are not specific to hardware products. It’s probably significantly higher for totally new hardware products.

The good news is that most funded campaigns push through and deliver, but a large percentage don’t deliver on time. Once again, I think it is much higher than 35% of hardware product campaigns that fail to deliver on time.

Following tips #1 and #2 (don’t underestimate development and scaling) will go a long ways in helping you meet your product delivery promises.

Before you have a prototype, in order to estimate your final delivery date you have to estimate both development and scaling times. That is almost impossible to do accurately, regardless of your experience, at least not accurately enough to be making delivery promises.

Overpromising can also cost you valuable business relationships. For example, if you are dealing with a professional retail executive and you promise them order delivery in 6 months, even though your prototype is still held together with tape, then they will instantly recognize you as too inexperienced to be realistic.

I’ve found that nothing turns off retailers and investors more than making unrealistic promises.

Ideally, to avoid this, never promise to deliver on something until you have it actually in your hands! At the very least, wait until you have a production ready prototype, and a manufacturer identified, before you even think about committing to a specific delivery date.

By no means do I mean to imply that you shouldn’t get customers and investors involved in your project early on. You definitely don’t want to make sales or funding an afterthought to development. Just to don’t commit to something unless you are confident you can meet it.

Breaking a promise is a sure fire way to destroy a relationship.

#6 – Focus on sales and marketing

It’s common for entrepreneurs to place all their energy into product development, while neglecting sales and marketing. Sales and marketing are just as challenging and just as slow as product development.

If you wait until after you finish development before you begin thinking about sales and marketing then you will likely add at least a year or two before you reach market in a significant way.

However, sales can be intimidating for many entrepreneurs, especially introverted ones. I can say that from experience, because as an engineer developing a product I was terrified of sales. It was completely out of my comfort zone.

The truth is, if you want to be successful as an entrepreneur you must leave your comfort zone! If an introvert like me can manage to present my product to billion dollar retailers, run a busy tradeshow booth, and manage a large team of sales people, then I know you can do it too.

Also consider the option of bringing on a co-founder with sales and marketing experience. It can be advantageous to have a team comprised of a technical founder, plus one with marketing experience.

I also recommend that you hire independent sales representatives in your particular industry. Sales reps work on commission, so you only have to pay them once your customer pays you for any sales. This arrangement really helps with cash flow.

#7 – Know what your end customer wants

It’s easy to think you know what your future customers want. That’s a trap so many entrepreneurs fall into, because you don’t know what they really want.

It’s also easy to believe that positive comments about your product is proof that your product will sell. Don’t make the mistake of believing this either.

You will never know if your product will actually sell, until it is actually for sale. Until someone makes a purchase, with real money, everything is just speculation. Although, proper market research and product validation can definitely reduce the amount of speculation. But still, the only real proof is real sales!

You need real sales feedback as soon as possible, but it takes a lot of time and money to have a product ready to actually sell.

Crowdfunding provides a great intermediary solution. Investors are putting actual money down on your product before its ready for sale. You can use this as real sales proof.

You do, however, need to be pretty far along in your development process to run a crowdfunding campaign. Since as we discussed in tip #5 you don’t want to overpromise when you can deliver your product. If do, you may find yourself dealing with a lot of upset investors.

# 8 – Build an online community immediately

If you haven’t begun building an online community around your product, do so right now! Okay, finish reading this article first, then start building your online community.

You want to begin growing your online community at the same time as you develop your product, because building an online presence takes a long time, so the sooner you start the better.

Why do you need an online community?

Firstly, it will help you gather valuable feedback about your product during development.

Secondly, you will also need a large contact list if you launch a crowdfunding campaign. Never expect significant success on Kickstarter without sending your own audience to the campaign to get the momentum going.

Thirdly, once your product is finally ready to sell, your online audience will be ready to buy.

Don’t focus too much effort though on social media. It’s really all about email, and you need to build a list of email addresses. In fact, building an email list is probably the most important aspect of any successful online business.

As an example, let’s say you wanted to estimate how much a particular online company generates in revenue, yet the only data you have is their website traffic, their social media following, and the size of their email list. I’ll bet that their email list size (and quality) will be what most closely correlates with their revenue.

One final comment on social media. What happens if you get locked out of your Facebook or Twitter account? There is little to no recourse for business owners when this happens. Overnight, you can lose your entire audience!

A couple of years ago I got locked out of my Facebook account, and I no longer had the mobile number they had on record. After too many attempts at guessing my password, I got locked out of my account. I tried to get through to someone at Facebook numerous times, but that was hopeless.

Because of this I lost all of my Facebook followers. Fortunately, I never invested much effort into building my Facebook audience, so this wasn’t a serious loss for me.

The lesson here is you need to own the platform that you use to communicate with your audience. Nothing beats email in this regard.

Even if Google decides to shut down traffic to your website overnight (it does happen), you would still have your email list.

Conclusion

By following these eight essential tips you will shorten your journey to bring your hardware product to market.

In summary, don’t underestimate the difficulty of bringing a new product to life, focus on marketing and sales much sooner than you think necessary, don’t overpromise on what you can deliver, don’t think you know what your customers really want, keep your product simple, and never sacrifice quality.

The key to success is knowledge of the obstacles that lie in your path and a realistic plan on how to overcome those obstacles. Helping you accomplish this is the goal of the Predictable Hardware Report.

If you need engineering support, coaching, training, and connections to help bring your new electronic hardware product to market then be sure to check out the Hardware Academy.

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Willem
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Willem

Due to the fact that I am already doing most of this stuff for my gaming mouse company is very encouraging, thanks for the boost!

John Teel
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That’s great to hear Willem!


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