Building lean-hardware-startups
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This document discusses strategies for hardware startups. It outlines 12 types of "wares" that hardware startups should avoid, such as "funware" with no business model or "vaporware" that can't be built. It also discusses challenges with scaling hardware, the need to validate problems before solutions, and strategies for funding different stages. The document promotes HAX, an accelerator program to help hardware startups succeed from prototype to business.
Building lean-hardware-startups
- 2. TALK TO US! All this is on www.slideshare.com/haxlr8r We LOVE questions & comments! @haxlr8r @benjaminjoffe
- 4. HARDWARE RENAISSANCE PROTOTYPING IS EASIER THAN EVER Arduino / Pi / Spark / 3D printing / Sensors / BLE / Smartphones / Cloud SUPPLY CHAIN IS BETTER THAN EVER – China (Shenzhen) has the whole chain – Fast, Affordable, Scalable MORE FUNDING – KickStarter (250,000+ HW backers!), IndieGoGo – More VC & Angel money, acquisitions
- 5. BE A MASTER OF THE PROBLEM What matters is the problem, not the solution!
- 6. “The question is no longer: can we make it? But: what can we make that’s worthwhile?” Dr. Bjoern Hartmann Interactive Device Design Critical Making HARDWARE TODAY
- 10. Startup Accelerator for Hardware From Prototype to Business In Shenzhen & San Francisco HAXLR8R
- 11. 8 THINGS ABOUT HAX 1. 111 days 2. Shenzhen + San Francisco Demo Day 3. Up to $50k for 6%-8% 4. HAX team (DFM, EE, ID, sourcing) & 50+ mentors 5. 50 startups, 130+ founders 6. 60% Americas // 20% Europe // 20% Asia 7. IOT, wearables, robotics, etc. 8. 20+ crowdfunding campaigns, avg. $200k
- 12. FOUNDERS LEARN TO… Position company & product Buy on Taobao Shop in Huaqiangbei Source on Alibaba Speak enough Mandarin Prepare a DFM Select factories Manage production Engage advisors Work with media Prepare for crowdfunding Scale Fundraise Enjoy the journey!
- 13. HAX MISSION: EMPOWERMENT 1. Build the right thing 2. Build things right 3. Ship fast
- 17. HAX 4 GRADUATES 2 robotics 2 sports tech 2 health tech 1 green tech 1 3d printer 1 connected camera 1 smart city logistics
- 18. SPARK RAISES
- 19. MEDIA COVERAGE
- 20. LEAN HARDWARE PHILOSOPHY 1. Validate problem vs. Assume 2. Partner w/ factories vs. Abdicate 3. Fast to market vs. Long cycles 4. Capital effective vs. Capital intensive 5. User backed vs. Venture backed
- 21. 1. Validate problem vs. Assume 2. Partner w/ factories vs. Abdicate 3. Fast to market vs. Long cycles 4. Capital effective vs. Capital intensive 5. User backed vs. Venture backed LEAN HARDWARE PHILOSOPHY + HAX Approach Meaningful Aligned with founders
- 23. 3 OLD MYTHS IN 1 SENTENCE “China only makes cheap stuff at scale and copies”
- 24. TODAY’S REALITY • Your iPad • Start from 1 unit • IP is at risk if: –Your product is trivial –You pick the wrong partner –You’re already successful
- 25. THE COST OF NOT BEING IN CHINA “You have to consider the cost of not being in China.” Will Hart Chief of Staff Spark.io (HAX 2)
- 26. WHAT ABOUT MY IP? “Protection of IP can be complex manufacturing or product, community, and cloud based services.” Idan Beck Founder gTar (HAX Fund)
- 27. KNOW-HOW “Chinese factory engineers master the lost art of injection molding.” ”On the factory floor you solve problems much faster, speaking Bunnie Huang Hardware Hacker Bunnie Studios (HAX Mentor)
- 28. WHY GO TO CHINA EARLY? • Prototype better and faster – PCBs overnight – All the components you need – Tools for prototyping – “Lost art of injection molding” – Design for manufacturing – (much) Cheaper • Build and scale fast – Integrated supply chain – Scale up from 1 to any number – Prepare scaling before it’s painful Where is the mold?
- 29. WHY WOULD A LAOBAN CARE?
- 30. FOUR-AND-A-HALF REASONS 1. Future business 2. Improve capabilities 3. Use excess capacity 4. Internationalize 4.5 Fun The rest is up to you
- 33. STARTUP CHECKLIST 1. Product Is something working 2. Skills Can the team make it 3. Spirit Resourceful, Optimistic, Persistent 4. Positioning New segment or new market 10x better in some way or different Something hard to do
- 34. BUILDING THE RIGHT THING INITIAL PROBLEM INITIAL SOLUTION INITIAL PROBLEM NEW SOLUTION NEW PROBLEM INITIAL SOLUTION NEW PROBLEM NEW SOLUTION INITIAL PROBLEM INITIAL SOLUTION
- 35. STARTUP CHECKLIST 1. Product Is something working 2. Skills Can the team make it 3. Spirit Resourceful, Optimistic, Persistent 4. Positioning New segment or new market 5. Demand Proof / Customer discovery 6. Distribution How to sell 7. Plan Beyond first product
- 36. NOT JUST HARDWARE • Pure hardware can be copied • Something hard to do • HW + SW + Community –Almost all HAX startups use an app / cloud –Algorithms, something HARD to replicate –Community (GoPro, Makerbot, Glass…)
- 37. BEWARE OF THOSE 12 “WARES” wow such excite very hardware so future
- 38. FUNWARE 1. FUNware No business
- 39. CHINDOGU 1. FUNware No business Kenji Kawakami Chindogu pioneer (with tissue roll headgear + Fail-proof eyedrop glasses)
- 40. MORE CHINDOGU Baby mop Open eyes stickers Back scratching grid
- 41. FUNWARE 1. FUNware No business (includes NICHEware and ARTware)
- 42. EASYWARE 1. FUNware No business 2. EASYware Not defensible
- 43. EASYWARE 1. FUNware No business 2. EASYware Not defensible “Two sensors and an app” Nobel-grade research
- 44. PRESSY 1. FUNware No business 2. EASYware Not defensible PRESSY ($27) Funded Oct 2013 Raised $695,000
- 45. PRESSY 1. FUNware No business 2. EASYware Not defensible Speed Button ($10) (“kuai anniu”) Funded Jan 2014 Raised $34k
- 46. PRESSY 1. FUNware No business 2. EASYware Not defensible Xiaomi MiKey ($0.8) Launched April 2014 “If Xiaomi starts producing buttons like Pressy, we will start to produce smartphones.” - Founder of Pressy
- 47. SAMEWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning
- 48. THE BETTER MOUSETRAP MYTH 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning “Build a better mousetrap and the world will beat a path to your door” Ralph Waldo Emerson (maybe)
- 49. THE BETTER MOUSETRAP MYTH 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning The problem with mousetraps • 4,400 patents • 400 applicants per year • “most frequently invented device in U.S. history”
- 50. 47 companies launched 3D printers and raised $100K+ or more in crowdfunding. Source: Flybridge Capital Partners, 2014.6 COMMODITIZATION? Is it a commodity?
- 51. SOLUTIONWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem
- 52. 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem “When you have a hammer, everything looks like a nail” THE HAMMER PROBLEM
- 53. VAPORWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made
- 54. BACK TO THE FUTURE HOVERBOARD 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made
- 55. DROPKICKER 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made
- 56. LAMEWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec
- 57. WHEN SOFTWARE WAS STILL HARDWARE… LANDFILL IN NEW MEXICO FULL OF GAME CARTRIDGES…
- 58. WHEN SOFTWARE WAS STILL HARDWARE… 5.5 weeksCREATOR NOW A PSYCHOTHERAPIST FOR SILICON VALLEY'S HI-TECH COMMUNITY
- 59. FAILWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing
- 60. AHEAD OF THEIR TIME?
- 61. LATEWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing 8. LATEware Validated market but woke up competitors
- 62. “WHY LOCKITRON HAS TAKEN SO LONG TO SHIP” (CROWDFUNDED WITH $2.3M IN 4Q2012)
- 63. LOSSWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing 8. LATEware Validated market but woke up competitors 9. LOSSware Minimal or negative margins
- 64. “YOU WILL BE RECEIVING SHRU AT COST PRICE.”
- 65. BOREWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing 8. LATEware Validated market but woke up competitors 9. LOSSware Minimal or negative margins 10. BOREware People stop using it
- 68. Mi Band by Xiaomi Fitness Tracker ($13) - Counts your steps Vibrates you awake 30 days standby Water resistant NEWS FLASH!
- 69. FUTUREWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing 8. LATEware Validated market but woke up competitors 9. LOSSware Minimal or negative margins 10. BOREware People stop using it 11. FUTUREware No market before years
- 71. LOCALWARE 1. FUNware No business 2. EASYware Not defensible 3. SAMEware Bad positioning 4. SOLUTIONware Solution looking for a problem 5. VAPORware Can’t be made 6. LAMEware Not on spec 7. FAILware Successfully built the wrong thing 8. LATEware Validated market but woke up competitors 9. LOSSware Minimal or negative margins 10. BOREware People stop using it 11. FUTUREware No market before years
- 72. SOME EXTRAS 13.TEMPware Temporary solution
- 73. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition
- 74. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba
- 75. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba 16.INFRAware Requires special infrastructure
- 76. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba 16.INFRAware Requires special infrastructure 17.SOLITware Single founder
- 77. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba 16.INFRAware Requires special infrastructure 17.SOLITware Single founder 18.AWKware Awkward form factor or usage
- 78. “TOKYO-BASED ARTIST ARRESTED FOR 3D PRINTING HER VAGINA”
- 79. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba 16.INFRAware Requires special infrastructure 17.SOLITware Single founder 18.AWKware Awkward form factor or usage 19.GROSSware Image problems
- 80. SOME EXTRAS 13.TEMPware Temporary solution 14.WEAKware Limited value proposition 15.ALIware Repackage a product sourced on Alibaba 16.INFRAware Requires special infrastructure 17.SOLITware Single founder 18.AWKware Awkward form factor or usage 19.GROSSware Image problems More ideas welcome!
- 81. SCALING HARDWARE
- 82. TIMEFRAME $ PROTOTYPING PRODUCTION SCALING 3 months ~ 2 years 3 months ~ 2 years 1+ year TIME ARE YOU REALISTIC? SOME THINGS TAKE TIME ARE YOU TOO SLOW? MAYBE YOU NEED HELP
- 83. THE RETAIL CHASM PROTOTYPING PRODUCTION SCALING $ Founders Friends Family Fools Crowdfunding Accelerators Angels Grants Sales Factoring Banks VCsPre-orders RETAIL CHASM TIME
- 84. SCALING STEP BY STEP $ TIME Specialty stores Big box retailers Online retailers Direct
- 85. LEAN RETAIL RULES Keep demand higher than distribution Your customers are your best investors Retail is not a sprint. Learn at each step Cash flow is king
- 86. SAVE YOUR CASH FLOW! Pre-sales (best!) Credit from supplier (it’s like a bank loan!) Factoring (purchase order financing) Bank credit lines Revenue-based financing VC (most expensive money!)
- 87. KEY STAGES FOR INVESTMENT 1. Concept 2. Work-like prototype 3. Look-like Prototype 4. DFM 5. Crowdfunding 6. First shipment 7. Retail 8. Pre-IPO
- 88. KEY STAGES FOR INVESTMENT 1. Concept 2. Work-like prototype 3. Look-like Prototype 4. DFM 5. Crowdfunding 6. First shipment 7. Retail 8. Pre-IPO We recruit here We take you there We help anticipate this Awaiting you there!
- 89. HAX WANTS YOU
- 91. @HAXLR8R @BENJAMINJOFFE BENJAMIN@HAXLR8R.COM SLIDESHARE.COM/HAXLR8R HAX WANTS YOU! Share Comment Apply
Editor's Notes
- #7: http://www.forbes.com/sites/rakeshsharma/2013/11/25/educating-a-maker-the-berkeley-perspective/
- #43: http://www.geektime.com/2014/04/03/xiaomi-copies-pressy-and-comes-out-with-the-mikey-which-costs-less-than-1/ http://www.techinasia.com/new-xiaomi-mikey-not-very-original/
- #44: http://www.geektime.com/2014/04/03/xiaomi-copies-pressy-and-comes-out-with-the-mikey-which-costs-less-than-1/ http://www.techinasia.com/new-xiaomi-mikey-not-very-original/
- #45: http://www.geektime.com/2014/04/03/xiaomi-copies-pressy-and-comes-out-with-the-mikey-which-costs-less-than-1/ http://www.techinasia.com/new-xiaomi-mikey-not-very-original/ http://get.pressybutton.com/
- #46: http://www.geektime.com/2014/04/03/xiaomi-copies-pressy-and-comes-out-with-the-mikey-which-costs-less-than-1/ http://www.techinasia.com/new-xiaomi-mikey-not-very-original/
- #47: http://www.geektime.com/2014/04/03/xiaomi-copies-pressy-and-comes-out-with-the-mikey-which-costs-less-than-1/ http://www.techinasia.com/new-xiaomi-mikey-not-very-original/
- #55: http://huvrtech.com/
- #63: http://techcrunch.com/2014/07/13/1025132/
- #65: https://www.kickstarter.com/projects/1046165765/egg-the-intelligent-cat-companion
- #79: http://techcrunch.com/2014/07/15/tokyo-based-artist-arrested-for-3d-printing-her-vagina/