Posts Tagged "hardware startup"

Hardware Startups: Increase Chance for Success by Reducing Risk

November 29, 2016

Building a hardware startup is not for the faint of heart. In an ideal world, we would be able to eliminate all risk and guarantee ourselves success—since that isn’t possible, the next best thing is to find ways to reduce risk as you develop and bring your product to market. By reducing risk in a number of areas you are increasing your chances for success. Below are a few ideas on how to reduce risk for your hardware startup.

3D CAD drawingBuild Prototypes

Developing and building a prototype proves that you can construct and deliver a finished product with the capabilities you want in your product, while staying on budget. A prototype is a baseline for your team and lets you work out any issues early in the design process. During prototype development you will also be able to assess if there are alternate and more efficient ways of building your product—thus, saving both time and money.

Along with prototype development, you want to start the DFM (design for manufacturability) process immediately. This means that you are developing your product to best fit manufacturers’ capabilities and requirements. It can be a costly mistake to build a product with the mindset that a manufacturer will just be able to deliver what you provide them—this is almost never the case. To avoid the (costly) risk of having to redesign your product, start the DFM process congruently with prototype development.

Gather Design Feedback

While you will have an engineering partner working on the development of your hardware product, it is always a good idea to get another set of eyes to review the design. Large corporations have multiple engineers review products to verify the design and provide valuable feedback, before manufacturing begins. A hardware startup doesn’t have the budget of a large corporation, but it can emulate this valuable business practice to reduce risk.

Connect with the Audience

Start building your audience and defining your target market early in the product development cycle. Your target market will be able to provide you with design feedback from a customer point-of-view and also help build interest in your brand. If you wait to connect with your audience until after you launch, you have done your startup a disservice by not building excitement early on and gaining market traction. When you build a rapport with your target market before your product launch, you will have customers ready to buy your product as soon as it’s available.

Building a hardware startup can be challenging; however, with some foresight you can greatly minimize risk while increasing your chance for success.

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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: Overcoming Failure to Find Success

November 17, 2016

“Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.” – Denis Waitley

hardware startupsBuilding a hardware startup is hard work, and the road to success is often dotted with moments of failure, however these moments of adversity make you stronger as an entrepreneur. We tend to perceive failure as more public than success, and try our best to avoid it so as not to be embarrassed. The simple truth is—no great success was ever achieved without failure. So in order to succeed in the world of hardware startups, you must first understand that failure is just a stepping stone to greatness. Below are three common failures experienced by hardware startups, and ideas on how to overcome these obstacles.

Unachieved Funding Goal

The fact is that hardware startups are costly. Between product development and manufacturing, costs can add up quickly. While some entrepreneurs are able to bootstrap and fund the business themselves, more often than not, hardware entrepreneurs need to seek outside funding to help launch their product. If you are having trouble with funding, here are a few points to consider:

  • Setup a crowdfunding campaign. Not all crowdfunding sites are equal. There are lots of crowdfunding websites out there, and you need to do your research to find which one aligns best with your product and brand. (Here is a Forbes article that outlines the top 10 business crowdfunding websites.) When it comes time to setup your campaign, take the time to plan it out, build your “story” and develop a quality video to help market yourself to potential backers. The more creative and organized your crowdfunding campaign is, the more likely you are to raise funds.
  • Connect with Venture Capitalists. VCs can be intimidating. Many entrepreneurs are less willing to approach VCs because of certain preconceived notions—such as, they are too busy, will ask for too much business equity, or hard to do business with. While these might ring true for some VCs, it most certainly is not true for all Reach out to your business network and try connecting with VCs that have experience in your industry.
  • Talk with industry experts. Meet with and interview experts in the industry your hardware startup is trying to break-in to. These experts have vast experience and might be able to point you towards funding opportunities.
  • Reach out to family, friends and business associates. These people have a vested interest in you and want to see you succeed; therefore, they can make excellent investors. Be sure to approach family, friends and associates in a professional business manner and treat meetings with them like you would any other investor. You want them to know that you are serious about your startup and are ready to put in the time and effort to find success.
Target Market Lacks Interest

The main reason your target market will lack interest is because the product is not meeting their needs. You need to first define what the target market wants out of your product and then structure the foundation of your product around these desires. If you begin to build your audience while your product is still being developed, you will have people ready and eager to buy your product when it is available for sale.

  • Market Research. Early in the product design process, reach out to your target market to solicit feedback. These are the people that you want to buy your product, so you need to be sure that you are meeting their needs. Use surveys, questionnaires and focus groups throughout the product development process to gauge customer interest.
  • Build a Functional Prototype. Take your market research one step further and create a functional prototype, or multiple if it can easily be done, to let potential customers test out your product. Allowing them to test your product for a period of time will let them really get a feel for your invention and the feedback you receive will be more specific and in-depth.
High Manufacturing Costs

As a hardware startup, manufacturing is going to be your single biggest expense. Keeping costs low while your product is new to the market will help you reduce your risks and stay out of the red.

  • Ramp up manufacturing volume slowly. Start off manufacturing your product locally and in small batches. Generally, working with a local manufacturer will result in a higher quality product because you are able to closely monitor the manufacturing process. While sending your product overseas to be manufactured from the offset can be tempting, there are inherent risks and the worst case scenario is that you rush into manufacturing a large order and are then stuck with inventory that you simply can’t sell.
  • Negotiate, negotiate, negotiate. When you are researching manufacturing partners keep in mind that many things are negotiable. Yes, there will be unavoidable fixed costs, however there are also negotiable items and many manufacturers are willing to match or beat quotes from a competitor.
  • Have the Deposit Available. Money talks. At the end of the day, the manufacturer wants to get paid. If you have the deposit readily available, you find yourself in a strong negotiating position.

Failure is not permanent and it does not have to be the end. While no one enjoys failing, it is a chance to learn, grow and refocus your energy.

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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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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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