Building lean-hardware-startups
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Transcript of Building lean-hardware-startups
BY @HAXLR8R
BUILDINGGLOBAL
LEANHARDWARE STARTUPS
H A X
TALK TO US!All this is on
www.slideshare.com/haxlr8r
We LOVE questions & comments!
@haxlr8r@benjaminjoffe
HARDWARESTARTUPS
HARDWARE RENAISSANCEPROTOTYPING 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
BE A MASTER OF THE PROBLEM
What matters is the problem,
not the solution!
“The question is no longer: can we
make it?But: what can we
makethat’s worthwhile?”
Dr. Bjoern HartmannInteractive Device Design
Critical MakingUC Berkeley
HARDWARE TODAY
“LEAN HARDWARE”
OR
MAPPING THE PATHTO
HARDWARESTARTUP SUCCESS
WELCOME
TO THE
HARDWARE
JUNGLE
Startup Accelerator for Hardware
From Prototype to Business
In Shenzhen & San Francisco
HAXLR8R
8 THINGS ABOUT HAX
1. 111 days2. Shenzhen + San Francisco Demo Day3. Up to $50k for 6%-8%4. HAX team (DFM, EE, ID, sourcing) & 50+
mentors5. 50 startups, 130+ founders6. 60% Americas // 20% Europe // 20% Asia7. IOT, wearables, robotics, etc.8. 20+ crowdfunding campaigns, avg. $200k
FOUNDERS LEARN TO…Position company & product
Buy on TaobaoShop in HuaqiangbeiSource on AlibabaSpeak enough Mandarin
Prepare a DFMSelect factoriesManage production
Engage advisorsWork with mediaPrepare for crowdfundingScaleFundraise
Enjoy the journey!
干吗呀?
HAX MISSION: EMPOWERMENT
1. Build the right thing2. Build things right
3. Ship fast
“HARDWARE UNIVERSITY”
H A X
MONSTERS UNIVERSITY OR HARDVARD?
D >
H A X
HAX 4 GRADUATES
2 robotics2 sports tech2 health tech1 green tech1 3d printer1 connected camera1 smart city logistics
SPARK RAISES
MEDIA COVERAGE
LEAN HARDWARE PHILOSOPHY1. Validate problem vs. Assume2. Partner w/ factories vs. Abdicate3. Fast to marketvs. Long cycles4. Capital effective vs. Capital
intensive5. User backed vs. Venture backed6. Sustainable vs. Growth at a loss
1. Validate problem vs. Assume2. Partner w/ factories vs. Abdicate3. Fast to marketvs. Long cycles4. Capital effective vs. Capital
intensive5. User backed vs. Venture backed6. Sustainable vs. Growth at a loss
LEAN HARDWARE PHILOSOPHY
+ HAX ApproachMeaningful
Aligned with founders AS SEEN ON
WHY CHINA FOR
STARTUPS?
3 OLD MYTHS IN 1 SENTENCE
“China only makescheap stuffat scale and
copies”
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
THE COST OF NOT BEING IN CHINA
“You have to consider the cost of not being in China.”
Will HartChief of Staff
Spark.io(HAX 2)
WHAT ABOUT MY IP?
“Protection of IP can be complex manufacturing or product, community, and cloud based services.”
Idan BeckFounder
gTar(HAX Fund)
KNOW-HOW
“Chinese factory engineers master the lost art of injection molding.”
”On the factory floor you solve problems much faster, speaking the language of engineering.”
Bunnie HuangHardware Hacker
Bunnie Studios(HAX Mentor)
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?
WHY WOULD A LAOBAN CARE?
FOUR-AND-A-HALF REASONS
1. Future business2. Improve capabilities3. Use excess capacity4. Internationalize4.5 Fun
The rest is up to you
STARTUP CHECKLIST
http://whatthefuckismywearablestrategy.com/
STARTUP CHECKLIST1. Product Is something working2. Skills Can the team
make it3. Spirit Resourceful,
Optimistic, Persistent
4. Positioning New segment or new market
10x better in some way or different
Something hard to do
BUILDING THE RIGHT THING
INITIAL PROBLEM
INITIAL SOLUTION
INITIAL PROBLEM
NEW SOLUTION
NEW PROBLEM
INITIAL SOLUTION
NEW PROBLEM
NEW SOLUTION
INITIAL PROBLEM
INITIAL SOLUTION
STARTUP CHECKLIST1. Product Is something
working2. Skills Can the team
make it3. Spirit Resourceful,
Optimistic, Persistent
4. Positioning New segment or new market
5. Demand Proof / Customer discovery
6. Distribution How to sell7. Plan Beyond first product8. Ready The time is
right
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…)
BEWAREOF THOSE
12 “WARES”
wow
such excitevery hardware
so future
FUNWARE1. FUNware No business
CHINDOGU1. FUNware No business
Kenji KawakamiChindogu pioneer
(with tissue roll headgear+ Fail-proof eyedrop
glasses)
MORE CHINDOGU
Baby mop
Open eyes stickers Back scratching grid
FUNWARE1. FUNware No business
(includes NICHEware and ARTware)
EASYWARE1. FUNware No business2. EASYware Not defensible
EASYWARE1. FUNware No business2. EASYware Not defensible
“Two sensorsand an app”
Nobel-grade research
PRESSY1. FUNware No business2. EASYware Not defensible
PRESSY ($27)Funded Oct 2013Raised $695,000
PRESSY1. FUNware No business2. EASYware Not defensible
Speed Button ($10)(“kuai anniu”)Funded Jan 2014Raised $34k
PRESSY1. FUNware No business2. 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
SAMEWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning
THE BETTER MOUSETRAP MYTH1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning
“Build a better mousetrap and the world
will beat a path to your door”Ralph Waldo Emerson
(maybe)
THE BETTER MOUSETRAP MYTH1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning
The problem with mousetraps• 4,400 patents• 400 applicants per year• “most frequently
invented device in U.S. history”
47 companies launched 3D printersand raised $100K+ or more in crowdfunding.
Source: Flybridge Capital Partners, 2014.6
COMMODITIZATION?
Is it a commodity?
SOLUTIONWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
“When you have a hammer, everything looks like a nail”
THE HAMMER PROBLEM
VAPORWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made
BACK TO THE FUTURE HOVERBOARD1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made
DROPKICKER1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made
LAMEWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec
WHEN SOFTWARE WAS STILL HARDWARE…
LANDFILL IN NEW MEXICO FULL OF GAME CARTRIDGES…
WHEN SOFTWARE WAS STILL HARDWARE…
5.5 weeksCREATOR NOW A PSYCHOTHERAPIST FOR SILICON VALLEY'S HI-TECH
COMMUNITY
FAILWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing
AHEAD OF THEIR TIME?
LATEWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing8. LATEware Validated market but woke up
competitors
“WHY LOCKITRON HAS TAKEN SO LONG TO SHIP”(CROWDFUNDED WITH $2.3M IN 4Q2012)
LOSSWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing8. LATEware Validated market but woke up
competitors9. LOSSware Minimal or negative margins
“YOU WILL BE RECEIVING SHRU AT COST PRICE.”
BOREWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing8. LATEware Validated market but woke up
competitors9. LOSSware Minimal or negative margins10. BOREware People stop using it
BIGGEST TREND IN WEARABLES?
CHINA’S BAROMETER
Mi Band by Xiaomi
Fitness Tracker ($13)
-Counts your steps
Vibrates you awake
30 days standbyWater resistant
NEWS FLASH!
FUTUREWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing8. LATEware Validated market but woke up
competitors9. LOSSware Minimal or negative margins10. BOREware People stop using it11. FUTUREware No market before years
LOCALWARE1. FUNware No business2. EASYware Not defensible3. SAMEware Bad positioning4. SOLUTIONware
Solution looking for a problem
5. VAPORware Can’t be made6. LAMEware Not on spec7. FAILware Successfully built the wrong thing8. LATEware Validated market but woke up
competitors9. LOSSware Minimal or negative margins10. BOREware People stop using it11. FUTUREware No market before years12. LOCALware Too tied to a local ecosystem
SOME EXTRAS13.TEMPware Temporary solution
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba16.INFRAware Requires special infrastructure
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba16.INFRAware Requires special infrastructure17.SOLITware Single founder
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba16.INFRAware Requires special infrastructure17.SOLITware Single founder18.AWKware Awkward form factor or usage
“TOKYO-BASED ARTIST ARRESTEDFOR 3D PRINTING HER VAGINA”
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba16.INFRAware Requires special infrastructure17.SOLITware Single founder18.AWKware Awkward form factor or usage19.GROSSware Image problems
SOME EXTRAS13.TEMPware Temporary solution14.WEAKware Limited value proposition15.ALIware Repackage a product sourced on
Alibaba16.INFRAware Requires special infrastructure17.SOLITware Single founder18.AWKware Awkward form factor or usage19.GROSSware Image problems
More ideas welcome!
SCALING HARDWARE
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
THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
FoundersFriendsFamilyFools
Crowdfunding
AcceleratorsAngelsGrants
SalesFactoringBanksVCs
Bridge of Death
Pre-orders
RETAIL CHASM
TIME
SCALING STEP BY STEP$
Bridge of Death TIME
Specialtystores
Big boxretailers
Onlineretailers
Direct
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
SAVE YOUR CASH FLOW!
Pre-sales (best!)Credit from supplier (it’s like a bank loan!)Factoring (purchase order financing)Bank credit linesRevenue-based financingVC (most expensive money!)
KEY STAGES FOR INVESTMENT
1.Concept2.Work-like prototype3.Look-like Prototype4.DFM5.Crowdfunding6.First shipment7.Retail8.Pre-IPO
KEY STAGES FOR INVESTMENT
1.Concept2.Work-like prototype3.Look-like Prototype4.DFM5.Crowdfunding6.First shipment7.Retail8.Pre-IPO
We recruit here
We take you there
We help anticipate this
Awaiting you there!
HAXWANTSYOU
HAX WANTS YOU!
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