Five Big Mistakes Hardware Startups Make: Here’s Why You Need to Talk to Your Customers

Learn how to avoid some of the worst customer mistakes made by inexperienced hardware startup founders and entrepreneurs.

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This article is based on a conversation between John Teel and Dave Millman of SalesDev.Global. Dave is a highly experienced sales engineer and an expert mentor available to help you inside the Hardware Academy.

Mistake #1 – Not validating your ideas with customers before starting development

Let’s say you have this brilliant idea for a new widget that’s going to solve some huge problem. The first thing you have to do is go out and talk to a bunch of prospective customers and ask them if they perceive the problem in the same way that you do.

If they all say, “Absolutely, that’s a huge problem for us,” then you might really be on to something. But if nobody else sees it as a problem, it might be an issue that only you recognize, and there may be no customers for your new widget.

So, spending lots of time and money developing your widget without first testing your idea with potential customers opens you up to a lot of risks.

And you can’t just ask your mom or your best friend. You’ve got to go out and ask those people who might actually buy this widget.

If, for example, your product is for homeowners, then talk to homeowners. If your product is a computer product, then ask people who buy accessories for computers.

This sort of market research doesn’t happen nearly enough. One of the biggest reasons is that it’s scary.

A lot of hardware founders tend to be technical people, and the idea of going out and approaching customers is terrifying, whereas the idea of hiding away in the lab and developing a product is exciting and fun.

Getting the opinions of prospective customers is a big challenge for a lot of hardware startups.

That’s where working in partnership with somebody else can help. Think of Steve Wozniak and Steve Jobs, for example.

Wozniak loved developing the perfect hardware and Jobs loved going out and meeting customers. What a perfect pair they made!

For a hardware startup, the perfect team is a hardware person, a software person, and a hustler, who is the one out there working with customers and doing the marketing.

One person could do it all, but in general, those who are good at engineering tend to not be as comfortable getting out and approaching customers.

Though, sometimes you just have to get over your fears and be willing to go outside your comfort zone.

I know from my own experience with my business, every time I talk to a client or a customer, I get new insight into problems or solutions that I can offer, or different ways of thinking about it.

Talking to your customers on a regular basis provides a lot of value. Whether you’re a product or service business, you need to understand your customer.

The most dangerous thing you can do is to assume you already understand the needs of your customers without ever asking them.

Mistake #2 – Not seeking early customer partners

It’s quite easy these days to find communities of like-minded people – people who share your interests and passions. Within these communities, you’ll undoubtedly come across folks who are as enthusiastic as you are about your idea.

They recognize the problem, and they will happily volunteer their time to help you. This is the concept of customer partners.

Don’t be afraid to tap into this resource. Take them to lunch once a month, or if they’re remote, figure out another way to keep up a relationship with them.

Send them an unsolicited gift certificate to thank them for taking the time to have a chat with you. We’re not talking about lots of money. Put in the time and effort to develop and maintain the relationship as you develop your idea and product.

Keep them in the loop – talk to them about the latest ideas you’ve had and the new problems you’re encountering.

They might have some interesting insights to contribute. They might be right or they might be wrong – it doesn’t matter either way. The key is that you’re discussing your ideas with another like mind who recognizes the problem and has thoughts on the matter.

If your startup is B2B rather than B2C, this process might look a little different.

In the case of B2B, it’s common to approach potential buyers, let them know the problem you’re addressing and the solution you have in mind, and ask them if they’re interested in becoming an early technology partner to help guide you.

The right time to start thinking about these partnerships is when you’re at the prototype stage. If we’re talking about internet software, then it’s when you have a prototype online. If we’re talking about hardware, maybe it’s a breadboard. But it helps to have something.

Be aware, though, that you’ll need to approach quite a lot of potential partners. Most will ignore you outright, and of those who bother to respond to your initial approach, most will not be interested. But keep at it, because finding a good early customer partner can be invaluable.

Mistake #3 – Leaving sales to the ‘sales guys’

The third mistake – which is somewhat related to the first two – is when a founder says, “when we’re ready to talk to customers, we’ll hire a sales guy.” What they’re doing is postponing the customer interaction that’s so crucial to have early on, and that’s a very bad idea.

A lot of founders want to outsource sales and even marketing. They want to hire a public relations company or bring someone in to do all their sales and marketing. That’s the wrong approach.

As the founder of the company, in the early stages, you have to do that yourself. You can certainly outsource sales eventually, once you have a viable product and you need to scale.

You don’t have to be the one travelling the world and presenting to every retailer, but you definitely need to be involved, especially in the beginning.

Mistake #4 – Assuming customers will change their behavior to use your product

But wait, I hear you say: everybody changed their behavior to use smartphones. Everybody changed their behavior to use personal computers.

The thing to remember in the case of smartphones and personal computers, is that the companies who built these products – companies like Apple, Samsung, Motorola, Intel – were all massive enterprises with billions of dollars in the bank.

They can afford to operate in a different way. They can afford to throw something on the wall and see if it sticks. Big companies with lots of money have very different ways of operating from startups.

The reality for startups is that your product needs to fit into an existing behavior pattern in order to achieve initial success.

If it so happens that your product is overwhelmingly successful and grows like weeds, then you can indeed end up changing behavior with your product, and that’s great. It’s amazing when that happens.

But your initial success comes from operating in ways that people operate right now.

It’s difficult enough to sell a product even if the customer understands why they need it and it fits into their current behavior.

But when you add on the extra element of suggesting that using your product will require a change in their behavior, that becomes a lot more problematic.

Now you’ve got two things to sell them on instead of just one – you’ve got to double your sales effort.

Mistake #5 – Not asking customers what to do next

Steve Jobs had a name for this: he called it the second-product syndrome. In his own experience, he pointed out that the Apple II was a phenomenally successful product, but the Apple III was a dog.

Apple thought that they knew exactly what they should do next, but they didn’t go out and ask their customers what they wanted. In fact, the Apple II series outsold the Apple III for its entire lifetime.

This problem is quite common among successful entrepreneurs. You get your first product right. It’s a big success. But then you assume you know what your customers want from that point forward.

The problem is that by the time your first product has come out and become a success, a lot of time has passed since you identified the original issue and had your idea for a solution.

By the time you get around to designing your second product, three or four or maybe even six years have passed. A lot has changed since then.

Your customer’s wants and needs have certainly changed. You can’t simply assume that what held true back when you were starting on your first product, still holds true today.

What’s worse, if you were super-successful you now have competitors. That’s just a law of nature. Your competitors are now trying to differentiate themselves from you. They’re working really hard to add new features.

The market is now expanding and there are options that weren’t even on the table when your first product was designed all those years ago.

Not only do you now have competitors, but your own success has changed customers’ expectations, and now they want much more.

Whether you’re talking your first product or your 10th product, it’s always a mistake, no matter how much experience you have, to assume that you know what your customers want without asking them.

A good example here is Evernote. For those of us who adopted it early, we typically became lunatic flag-waving fans. It’s such an amazingly useful product.

They achieved some spectacular viral growth early on. First, it came out on the desktop, so you could easily save something from your browser, save something on your desktop, whatever you wanted. It was your memory for everything.

They saw the trend towards mobile early on, and executed on that extremely well. As each app store opened, they had an app ready.

Now, no matter where you were, you could save your notes – verbal, text, images or anything, and access them across all your devices. People fell in love with the product.

Then they started developing their Gen 2 products and they did bizarre apps like Food, which didn’t do anything new that you couldn’t do with Evernote.

Their Hello product for business contacts was a great idea, except it was all manual. There was no cleverness to it at all. They had a trivia game, branded styluses, notebooks and backpacks.

But their customers just wanted more automation and more sophisticated features of the stuff they’d come to love about Evernote.

A lot of new hardware entrepreneurs are fixated on just one product. They think their new widget is what’s going to make them rich. But in reality, you’re not developing just a product, you’re developing a company.

If you’re developing a company, you can’t have just one product. You have to be constantly innovating.

I know for a lot of people that putting out a second product may seem really far off in the distant future, but it’s something you need to have in the back of your mind from day one.

It may not be a completely new product, but you will be making changes to your widget, improving it, lowering your manufacturing costs, improving quality control.

You don’t ever reach a point where you say, “I’m done. I’m going to sit back now and collect the money.” That doesn’t happen with any business, and especially not with a hardware business.

The customer interaction process needs to be ongoing. You should constantly be seeking feedback from your customers about future products that you can develop.

If you want to build a sustainable company, you need to talk to – and most importantly, listen to – your customers.

This article is based on a conversation between John Teel and Dave Millman of SalesDev.Global. Dave is a highly experienced sales engineer and an expert mentor available to help you inside the Hardware Academy.

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