<LEAN/> <HARDWARE/>

INVESTING IN HARDWARE ���

STARTUPS

BENJAMIN JOFFE GENERAL PARTNER

HAXLR8R

wow

much wearable

such excite

very hardware

so future

much haxlr8r

HAXLR8R ���& ME

NICE TO MEET YOU NICE TO MEET YOU! 14 years in China, Japan, Korea 2013~ General Partner, HAXLR8R “Lean Hardware” advocate 2000~2012 Founder, Plus Eight Star Ltd. Founder, MobileMonday Beijing Angel investor (OtakuMode, Gengo, etc.)

Hardware Startup Accelerator From prototype to real business

In Shenzhen & San Francisco

ABOUT HAXLR8R

INVESTMENTS

•  40 startups – Wearables, Drones – 3D printing, IOT…

•  16 campaigns – 100% success – $250,000 average

•  Hardware Fund

MEDIA COVERAGE

LEAN HARDWARE

HARDWARE RENAISSANCE

PROTOTYPING IS SOLVED Arduino / Raspberry Pi / Spark Core / Sensors / BLE / Smartphones / Cloud / 3D Printing

SUPPLY CHAIN IS BETTER THAN EVER – China (Shenzhen) has the whole chain – Fast, Affordable, Scalable

MORE FUNDING – 250,000+ hardware crowdfunding backers – More VC & Angel

INVESTING IN HARDWARE

DISCLAIMER

• Hardware is hard

•  Talking is easy

•  Respect makers & failures

MINIMUM VIABLE STARTUP

< $1m Lifestyle

< $10m SME

> $100m Startup

Ocean of problems to solve

WHICH PROBLEMS DO THEY SOLVE?

•  Alerts •  Memory •  Replay •  Streaming •  Gaming •  Live coaching •  Focus •  Relaxation •  Safety •  Health •  Motivation

•  Training •  Performance •  Location •  Navigation •  Proximity •  Communication •  Contextual data •  Customer service •  Entertainment •  Fashion •  Art •  …

What matters is the problem, not the solution!

STARTUP CHECKLIST

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

PROBLEM / SOLUTION ITERATIONS

Is  there  a  bigger  

problem?  

Ini2al  solu2on    

Ini2al  problem  

Is  there  a  be4er  

solu2on?  

Yes  

No   No  

Ini2al  solu2on    

Ini2al  problem  

Ini2al  solu2on    

New  problem  

Build  

New  solu-on    

Ini2al  problem  

New  solu-on    

New  problem  

Yes  

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 8.  Valuation Is the price right

NOT JUST HARDWARE

•  Pure hardware can be copied

• Combine Hardware & Software

•  Build community (e.g. GoPro)

BEWARE OF THOSE “WARES”

TWELVE “WARES” TO AVOID 1. FUNware No business

Kenji Kawakami Chindogu pioneer

TWELVE “WARES” TO AVOID 1. FUNware No business 2.  EASYware Not defensible

TWELVE “WARES” TO AVOID 1. FUNware No business 2.  EASYware Not defensible 3. SAMEware Bad positioning

TWELVE “WARES” TO AVOID 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”

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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

TWELVE “WARES” TO AVOID 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 12. LOCALware Too tied to a local ecosystem

QUICK NOTE ON RECENT

DEALS

FACEBOOK BUYS OCULUS VR FOR $2B

INTEL BUYS BASIS FOR $100M

GOOGLE BUYS NEST FOR $3.2B

XIAOMI OVER $10B VALUATION

•  Start in 2010

•  $130 phone •  18.7m sold in 2013 •  $5B revenue •  40m in 2014 (est.)

•  Sells direct

INVESTMENT STAGES

KEY STAGES FOR INVESTMENT

1.  Concept 2.  Work-like prototype 3.  Look-like Prototype 4.  Design-for-Manufacture (DFM) 5.  Crowdfunding 6.  First shipment 7.  Retail 8.  Pre-IPO

INNOVATING AT LARGE COMPANIES

1.  Copy & modify

2.  Buy it then scale it –  Most projects fail –  Buying a successful product reduces risk

3.  Make a team work like a startup – Give autonomy – Limit resources

CHALLENGES OF WEARABLES

WEARABILITY

•  Style • Comfort • Weight •  Sizes

Steve Mann Wearable Pioneer

UTILITY

•  Price •  Speed •  Latency •  Feedback • Data vs. meaning • Active vs. Passive input •  Battery & charge time

HOW TO MAKE WEARABLES… •  Fun •  Social •  Personal •  Contextual •  Niche •  Invisible •  Viral •  Habit forming •  Non invasive •  Blend with fabric •  …

thank you!

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wow

much haxlr8r

very excite so hardware

much wearable

so future

BENJAMIN@HAXLR8R.COM @BENJAMINJOFFE