Hardware startups

01 sep 2017

written by: theodor spadeson
HARDWARE STARTUPS

As soon as the latest software architecture emerges, the corresponding hardware rolls out. The question: did the new hardware provoke the new software development or straight conversely, sets this dilemma a sort of a “chicken versus egg” feature.

At the time when software startups dramatically grow in number thanking the relatively simple manageability, hardware startups have not much to boast of. In fact, they did not, until the recent years.

In the common notion, the company willing to manufacture hardware must have a brand awareness, strong investments and to be well established. Many novice entrepreneurs try to force their startups into tight, poorly elaborated and commonly-used business plans, consequently facing hard difficulties. There is no repeatable business model for a hardware startup, so new-sprung entrepreneurs should keep in mind that "People either buy or they do not. There is no middle point."

Still HARDware?

Tech industry participants claim in unison “hardware is hard”, and they have a reason for this. There are several illustrative examples when highly-positioned and well-known companies botched in past few years because of mismanagement either of a manufacturing process or a supply chain.

HARDWARE STARTUPS

A couple of years ago the hardware startup trend changed beyond recognition. The hardware experts, willing to help small companies, triggered the profound changes. Also, the battle for king’s crown between big players made the price for materials collapse. To confirm the information, we will use iSuppli Research, which shows us that the cost of a Samsung Galaxy S3 in 2012 was $204, whereas Galaxy S4 with a row of upgrades and enhancements costs $233.

Another reason for making a small business big is crowdfunding revolution. Such websites like Indiegogo and Kickstarter give an access to finance for startups and connect the innovators around the world. The essential idea of crowdfunding websites is to judge and vote the projects which might have never got under way.

It becomes more and more popular to create the hardware in Silicon Valley, and entrepreneurs start realizing that offshoring business is not a cure-all solution, especially against the background of the Donald Trump’s election.

HARDWARE STARTUPS

The growing army of experts and consultants volunteering make the hardware creating easier, but it is still uneasy to deliver the device from a sketch to a customer. Potential consumers are very quarrelsome when it comes to hardware thanks to Apple. Whether you’re willing, or not, everyone will compare your product to the existing quality and performance bar. It means, that you, as an entrepreneur, have to analyze the expectations and either meet them or exceed, though it would be extremely hard to do without experience.

Numerous insanely successful hardware startups appeared in response to the changes in the technological environment. For instance, Oculus, GoPro, Pebble, Nest Labs nowadays are inspiring novice companies with their stories of success.

There is a thing, which is called “innovations”, and this thing can not be monopolized by conglomerates. Creative inventions can explode a real craze in the market if they are handled in the right way.

HAXLR8R

In addition to the latter, we would like to highlight, that enthusiastic companies, willing to help startups in their struggle, organize campaigns in order to invest and develop interesting projects all over the world. One of those so-called accelerators takes its origins in Shenzhen, China, and bears the name HAXLR8R. HAX accelerator is the most active hardware investor at the moment.

At CES 2017, HAX represented 82 hardware startups under its umbrella, most of which are CES winners: Amber (Best CES Startup by Engadget); Joy and startups (winners of the CES Innovation Award), and Bloom (#2 in TechCrunch Hardware Battlefield). Hax also brought 3 Chinese startups: Elephant Robotics, Cell Robotics, and Sonicam.

Having regards to the latest news from HAX, we would like to represent some core trends and features of modern hardware startup world.

Today, companies in all industries are increasingly using internet technology in their products. As examples of this tendency serve IP-cameras with the function of face recognition, iPhone-controlled thermostats and photo cameras with a set of programs on board.

The most attractive vectors for hardware startups are:

  • different types of drones, robotic couriers, because small aircraft ceased to be just entertainment. Today they take roots into the business sector of paid services;
  • 3D-press/print. In addition to metal, plastic, and glass, today's three-dimensional printers are capable of "printing" chocolate, and even human skin and bones;
  • smart portable gadgets;
  • "Touch" gadgets: not in the sense of the touch screen, but in terms of the availability of various sensors, from fitness bracelets to support devices in the Smart House systems.

We would like to admit the most successful startups at Kickstarter, which determine the frontmost vectors for hardware in modern society (Inventions, for which people eager to pay).

HAXLR8R

The era of "computerization-of-everything" is almost finished, and the next step should be a widespread standardization when the various "smart" things will start to communicate with each other. This will be the era of true magic.

"Smart hardware" quietly blends into our routine, and the whole class of portable devices proves this fact. Many people ignore the first generation of smart devices, however, when the benefits of such devices become apparent, all the conservative people turn into active users. Wearable and smart gadgets spread to several areas of our lives.

Complex technological inventions?

Companies aspire to get away from the stereotype of a "device for geeks" and to create a fashionable collection of watches, fitness bracelets and headphones. Therefore, the gadget should also look stylish and beautiful.

In general, trends show that smart devices, just like in a science fiction film, all firmly fix in our lives. All we need is not to be afraid to experiment and to offer potential users “smart assistants” which will simplify their everyday lives.

Recall those sci-fi movies like "Total Recall", "The Matrix"”, "Minority Report", "Space Odyssey", "Demolition Man", and others.

Let’s face it, we could not even think about the possibility of integration of interactive multi touch displays, video calls, virtual reality, driverless cars, bionic limbs, exoskeletons etc. into our routine. Of course, not all of the mentioned novelties are habitual today, but it is a matter of time.

Years later, we just deal with the innovations, and set a little story by.

Companies collaborate with scientific institutes and medical institutions in order to allow users to monitor their health and participate in the development of medicine.

Continuing with smart "helpers", it would be right to admit the growing popularity of home automatization. Interesting and innovative solutions for your house will help you to simplify the house owner’s responsibilities as well as to save your money on bills. Read our ("Battle of the smart homes") to gain some interesting information.

In contrast to the predictions of science fiction writers, robots still do not look like people, in fact, inventors are not particularly eager to create their human likeness. Though the robotic vacuum cleaners handle their duties easily, factories rebuild their assembly facility in order to use a fully-automatic manufacturing process, the technological symbiosis of a human and a robot remains in dreams.

Robots gradually touch all aspects of our lives, for instance, nowadays we already have various desktop robots (like 3D-printers, power tools, lab assistants), robots-attendants (robotic waiters, burger cookers, packers, sales assistants, cleaners, robotic paint chambers), so-called social robots for broadcasts and communication, robotic devices for entertainment (drones, robotic toys for pets), education (modular robots for manual assembly), electric cars with autopilot systems (Google Waymo, Tesla, BMW). To keep in touch with modern electric cars industry - read our article about autopilot systems.

In order to be successful with your startup, you should learn and analyze the sphere and the vector you choose. Study the common mistakes and get prepared for upcoming hurdles.

We would like to highlight the main mistakes, which can lead your startup to a breakdown. Define the correct streamline and presentation for your startup, because in most cases of business breakdowns these two key factors act a crucial role. For instance, your invention can appear too late for public, as the market offers advanced and mint devices, or conversely a “way-too-innovative” product can appear boring and unacceptable.

Solving problem is easier at a site.

Manufacturing of a device and its development frequently turn into a big mess, therefore solving problems is easier at a site. We mean, that to prevent misunderstanding and consequential issues you should consider following rules:

  • find a factory, which is geographically close to your native location;
  • do not let the manufacturer do your job: develop the invention together;
  • launch your development as soon as it possible. Remember, a good and working prototype is awaited;
  • carry out expertise, assess your needs as well as producer’s capabilities;
  • communicate without agents: you need to be understood literally and directly.

It is impossible to design a device without an understanding of how its parts are made. See into the process, explore it.

China

About China and its potential.

Despite the reputation of the country, which produces low-quality copies, today China is the largest producer of high-quality goods. IT giants from the United States and their manufacturing assets served as a shocking impulse for Chinese industry.

Today, to repeat the success of China in the electronics industry is as unrealistic as to repeat the success of Silicon Valley in the development of innovation. The country is open for orders and it offers quite profitable conditions of production, especially for the major market players. There are many ready-made solutions, and local designers are always ready to help with the prototyping and development.

China is extremely overfilled with manufacturing assets ready to promote your hardware startup.

Those people, who scoffed yesterday at amateurs making cheap replicas, today organize crowdfunding programs, stealing ideas from devices that are sold in the Chinese online store "Alibaba".

China

At the same time, the success of large companies in the transfer of production to China is very difficult to repeat, especially for a small startup. China has its authentic and special local ecosystem, and it calls strong adaptiveness. Even a simple business communication there is established quite differently.

Taking to account Donald Trump’s thirst to punish China and to return all of the Silicon Valley manufacturing assets back to the USA, the situation appears to be vague for the foreseeable future.

Mr. Trump’s overseas manufacturing restrictions can make hardware startups face hard hurdles. Donald Trump’s overall aim to reduce reliance on oversea manufacturing may also make it difficult for small U.S. companies to do business in international markets. Concluding the theme of hardware startup popularity, we would like to state, that nevertheless the upcoming restrictions and legislature, small companies and their ideas still have a perspective and beneficial future.

All those spokes in the wheels are overcomeable because techies are adaptive and quick-witted.

Moreover, the keystone cheapness of labor and availability of resources for hardware manufacturing will always make companies tend to outsource their projects abroad. Visible or not, hardware will drive opportunity that will be leveraged using software to disrupt the conventional. Get prepared.