Technical Difficulty Rating: 1 out of 10
When developing a new hardware product and bringing it to market, there are three fundamental variables under your control –speed, cost, and quality.
First, is the speed at which the product reaches the market. In other words, how fast can you develop the product, scale it, setup manufacturing, and get it on the market.
The second variable is the cost. How much will it cost to develop your product and scale up manufacturing?
The last variable relates to your control over the product quality. This has to do with ensuring that your product is manufactured properly and that they actually work as intended.
Unfortunately, you cannot choose to prioritize all three of these variables at the same time. At the most, only two of these variables can be a priority.
For example, you can’t prioritize getting your product to market as fast as possible and also prioritize getting it to market at the lowest cost possible without jeopardizing quality. On the other hand, if product quality and time to market are your top priorities, then the cost to get it to market will be much higher.
In general, most startups don’t have a lot of cash, unless you receive outside funding. This means that as a cash strapped startup you have no choice but to prioritize minimizing your costs.
You must minimize your development cost which is the hardest stage to pay for with outside funding since most investors won’t be interested until you have at least a high-quality prototype.
Most startups do not receive early seed financing, and are forced to bootstrap early development themselves, or with support from friends and family.
Once you get past development and you have a prototype, then you have more options for raising outside funding to pay for inventory or to scale up your manufacturing.
Secondly, startups must absolutely prioritize product quality. The quality of your product is something you should never sacrifice, especially in the beginning.
Putting a defective or poorly made product on the market is one of the best ways to kill a new hardware startup. It is really difficult to recover from a loss of initial market traction due to faulty design issues or defective products.
Quality control must be a priority for startups. You should monitor the quality of your product yourself, especially in the very early stages.
I typically recommend doing the final product assembly and packaging domestically for your initial, low volume manufacturing. This allows you to more easily monitor the quality of those units before you ship them out to customers.
You especially want to do this if you’re shipping product to big or important customers. You don’t want to ship bad sample units to a Walmart buyer, for instance.
However, you do have the option of reducing the complexity of your product which acts to lower the “quality” requirement.
For example, if you follow the Minimum Viable Product (MVP) strategy by limiting the number of product features then you can develop your product faster and cheaper, thus effectively lowering the quality variable.
But aside from minimizing your product’s features and complexity, you can’t sacrifice quality. Therefore, since you have to prioritize both cost and quality this leaves primarily one other variable to sacrifice – time to market.
If you want high quality products developed for a low cost, you are forced to take longer to get to market. Time is the one out of three variables that must be sacrificed by most startups.
Large companies, in contrast, will typically prioritize time to market. Development cost is not an issue for most large companies so they can focus on getting high quality product to market quickly. That’s not the case for startups that are lacking boat loads of cash.
If your product is truly differentiated and innovative, then you should be okay prioritizing low cost and high quality, instead of time to get to market.
That being said, by keeping your product as simple as possible (MVP), you should be able to get your product to market faster. The primary reason you want to get to market as fast as possible is so you can begin gathering market feedback, but you can’t sacrifice cost or quality.
When it comes to estimating your time to market, you also need to consider exactly how much time you have available to work on a project.
Let’s say you’re an engineer and you plan to develop a big portion of the product yourself. That’s great, but odds are you have a day job that’s going to require significant amounts of your time.
That means less time for you to work on your startup. That translates into taking longer to get to market.
Another choice could be outsourcing work to other engineers. That may speed up your time to market, but keep in mind this will cost more than doing the design yourself.
If you are in a rush to get your product to market as fast as possible, then be prepared to either sacrifice quality, or to spend a lot more money.
Any business is difficult, but a hardware startup especially requires long-term thinking. You cannot be constantly in rush mode.
Honestly, with my own product I was constantly rushing, and I’m not a very patient person at all. I was very intensely focused, like many of you, on my product and I wanted things to happen quickly. I was determined to just keep pushing harder to make it happen as fast as possible.
There’s a couple downsides to that strategy though. First, there’s a good chance you’re going to burn out before you cross the finish line. The finish line for any business, and especially a hardware startup, is going to be a lot further out than you think.
This is a marathon and not a sprint. Actually, it’s more like an ultra-marathon. You have to go into it with long-term thinking, and don’t try to push yourself constantly.
Most products are going to take about one and a half to two years to get to market.
Things you can do to rush may cut off a few days here, maybe a week or two there. Overall, these increments are too small to significantly decrease your overall time to market.
Even if you rush as fast as you can, when you’re limited in resources and money, then you can only go so fast because most likely it’s going to be you and perhaps a small founder team.
Rushing also means you’re going to make mistakes and you’re going to miss things. You may be so focused on pushing to get the product out that you’re not really incorporating some of the early market feedback.
Rushing means that you won’t want to make any changes, even if early market data shows the product needs to be tweaked in some way. If critical changes set you back, say, three months, is rushing to market really worth it? If you are trying to get to market as fast as possible, you may miss out on vital feedback and product revisions.
Being in a hurry is the wrong type of mindset for founders of hardware startups. Focus on making small incremental steps as you go. Success is not going to happen overnight so don’t force it.
So what is a realistic amount of time to get your product on the market? One and a half to two years is a realistic goal for getting most products on the market. The exact time it will take depends on your skills as a developer and the product’s complexity.
The quickest you could ever get a new hardware product to market is one year, but I’ve not really seen that happen. You can realistically expect it to take about one year to develop your product, and then another year to get manufacturing up and running smoothly.
Expect it to take an additional year or two before you’re generating enough revenue to pay yourself a full time salary, and still have some profit left to invest back into your company.
Five years from when you start is a realistic goal for having a serious business, significant income, and profit.
Most hardware businesses need 5 to 10 years to have any significant value as a company. Within five years you may be able to pay yourself a nice salary of $100,000 or $200,000.
Most likely once you get 5 to 10 years out, then you get to the point where you can get the business up into the millions of dollars in revenue. However, you will still have a limited income. But, you will always have the potential to sell the company.
Expect it to take three to five years to have your product on the market, selling on a regular consistent basis, making revenue, and constantly growing.
Don’t rush your product to market. Instead, focus on minimizing your cost as your number one priority. By minimizing your development cost (and product complexity) you minimize the financial risk of bringing the product to market.
As a startup, unless you have hundreds of thousands of dollars to spend, you’re not going to be able to prioritize time to market, nor should you for most hardware products.
By sticking to realistic time frames, and avoiding the impulse to rush to market, you have a much greater chance for success.
Are you ready to discover the smart way to develop a new electronic hardware product? If so then check out the Predictable Hardware Report.