Posts Tagged "hardware startup"

The Top 3 Challenges Between Launching & Scaling Your Hardware Startup

October 11, 2016
3D Innovations

Each stage of launching a hardware startup comes with its own set of challenges. While the challenges are unique for each business and each industry, below are the top three universal challenges we have seen arise time and again.

As you read through the two lists, you will notice a theme developing between the stages. During the launch phase, the challenges tend to focus on the startup founder and business acumen. As the hardware startup scales though, the challenges tend to focus more on the manufacturing side of the business. This is why the importance of finding the right manufacturing partner for your startup from the get-go cannot be stressed enough.

Challenges when launching a hardware startup:
  1. Funding. Whether you plan to bootstrap or seek outside assistance, funding is typically the main hurdle. Unlike software development, hardware development requires a large amount of capital for prototyping, testing, packaging, and tooling/mold for production manufacturing. The initial round of funding will usually suffice through the development and prototyping stages, but will likely require additional funding once the product is ready for production and distribution.
  2. Lack of Knowledge. Most startups do not have the internal resources and knowledge to plan and thoroughly develop each product development stage. This lack of resources means that necessary design, prototyping, testing, certification, and manufacturing requirements can get overlooked. Main challenges with the manufacturing process include, vendor management and supply chain resources. Both of which are critical to developing a successful startup. In order to combat these challenges, connecting with outside product development firms/resources and experts will not only help accelerate product development but also ensure that these challenges will be manageable and not the downfall of your startup.
  3. Identifying Opportunities. Identifying market opportunities and developing go-to market strategies is another common pitfall. While hardware startup founders are intensely focused on product development, creating a sound business strategy can fall to the wayside. Connecting with distributors and existing sales channels early in the product development process should be happening while the product is still in development. Building these partnerships takes time and the earlier you start, the better.
Challenges when scaling a hardware startup:
  1. Manufacturing & Inventory Management. Scaling up manufacturing requires a larger influx of capital as compared to the launching stage. However, this is a good problem to have since it means that the market has received your product well and demand is abundant. It will also mean that some level of product inventory is required, so having additional space and location for the product is not only necessary, but a vital part of your logistics plan.
  2. Manufacturers Capabilities. Depending on your manufacturer’s capabilities, this can make or break scaling opportunities. Manufacturers may not have enough resources, machinery, and capabilities to meet your product’s demand.  If a manufacturer is not setup for high volume production, then the output required will not be able to keep up with the required amount needed to fulfill orders.  Several well-known and successfully funded Kickstarter campaigns have run into this problem, causing headaches for the company and frustrated customers waiting for their products to be packaged and shipped.
  3. Meeting Demand. Meeting the demand of the market will be dependent upon the manufacturing capabilities. You need a manufacturing partner that will be able to deliver enough of your product on-time and on-budget. If your manufacturing partner cannot keep up with customer demands, your startup, brand and product will suffer —and this could spell doom for your business.

By now we have all heard the saying, “hardware is hard” — however, with proper planning and experts by your side, launching your hardware startup doesn’t have to be impossible.

Have questions about launching or scaling your startup? Send them our way, info@3d-innovations.

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3D Innovations is a Product Development Company – from the 3D Design to a fully functional 3D Prototype & Product.

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Hardware Startups: Defining Your Niche Market

August 22, 2016
3D Innovations

Launching hardware startups, or any type of business for that matter, is a gamble—but defining and finding your niche market doesn’t have to be. Knowing your niche market is one way for hardware startups to quickly get their product into the hands of consumers and find success.

What is a niche market?

niche_market“A small but profitable segment of a market suitable for focused attention by a business. Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them.” (Business Dictionary)

Developing a product that specifically targets a segment of the market that is not having their needs met is a great way to scale a business quickly. The competition is low and the barriers to entry are minimal, which is an ideal landscape for launching a hardware startup.

Defining a Niche Market

Defining your niche market means that you need to have a deep understanding of both your product and the consumers you are marketing your product towards. Below are a few ideas on how to define a niche market for your hardware startup.

  • Define The Gap. What is missing and how will your product address it? Identify “the gap”, or problem, in an existing larger market that you aim to solve.
  • Understand Your Ideal Customer. With whom do you want to do business? Be as specific as you can. Create a “wish list” and narrow your ideal customer down as much as possible. For example, a small niche would be: customers located in Northern California, which make $60,000+ a year and are avid outdoor biking enthusiasts. This focus will help you develop your product and find your target market.
  • Focus. Clarify the product that you want to develop and sell. Have a clear understanding of your product and how it meets the needs of your ideal consumer. For example, you don’t want to say that you are going to design a GoPro accessory; instead you can say that you want to sell a GoPro accessory that easily attaches to a baseball hat.
  • Identify Your Strengths. What sets your hardware startup apart? Three factors to consider, what makes your startup unique, identifiable and is it scalable? You should be able to apply these three characteristics to both your startup and your buyer personas. While your business might be starting out in a small niche, having a product that is scalable will translate into long-term growth and success.

Once you have a clear understanding of the niche market you are aiming your product towards, take time to test this market and be ready to re-evaluate if necessary. In the end, having a firm understanding of your niche market will mean that your startup is taking a calculated risk, and not just a gamble.

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3D Innovations is a Product Development Company – from the 3D Design to a fully functional 3D Prototype & Product.

Startup Connector is a Manufacturing Accelerator helping companies commercialize—turning ideas into products.

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