Often times, using the word “hardware” is taboo during a venture capital pitch meeting. Compared to software projects, developing hardware is capital intensive, yields lower margins, and causes manufacturing headaches. For these reasons, many investors assume that hardware companies will not be able to cross the colloquial “valley of death”.
However, the recent exits of companies such as Square and Nest have shown that hardware investments can be attractive. The major industry disruption that investors look for can also be found in hardware innovations, which can serve as platform technologies for other value-added services.
Recently, Dorm Room Fund invested in Resonado, an exciting hardware company that plans to revolutionize the speaker industry. Resonado is redefining the shape of sound with its patented Flat Core Speaker (FCS) technology which has the ability to improve almost any existing speaker. By rethinking the core mechanism behind how sound is produced, Resonado is setting the new standard for the speaker industry. Resonado is freeing the speaker from its structural and industrial design restriction by allowing the speakers to have any shape and format. The speakers are smaller, lighter, and superior in quality to analogous cone-shaped speakers.
Resonado is a perfect example of an attractive investment; innovative technology that has the potential to disrupt the audio industry and gain significant market share. Of course, all hardware companies will face challenges. Resonado, however, stands an excellent chance of crossing the ‘valley of death’ for several reasons:
1) Revolutionary technology:
Resonado’s technology is truly revolutionary, not a derivative of previous speaker systems. Their Flat Core speaker technology can deliver the same, if not better, power output and sound quality as a conventional cone-shaped speaker while occupying only 30% of the size and the weight. Furthermore, Resonado’s speakers are not confined to a specific shape. Resonado is freeing the speaker from its structural and industrial design restriction by allowing typical conical speakers to take any shape from S-shape, O-shape, or any other shape imaginable!
2) Aggressive IP strategy:
In just 3 years, Resonado already has 9 issued patents with 3 additional patents pending. Resonado’s ability to rapidly develop defensible technology brings inherent value to the company, increasing their ability to differentiate their product and broadening the types of business partnerships they can forge.
3) Close relationship with experienced manufacturers:
From the get-go, Resonado understood that being able to reliably manufacture their custom products at large scale will be critical to their success. As such, Resonado has focused on making sure that their entire product development process will seamlessly integrate with a collaborative manufacturer. In addition to all of the technological advances of Resonado’s speakers, they have also been able to simultaneously make the speaker manufacturing more consistent, saving major costs from manufacturing defects. This focus on design for manufacturability will enable them to rapidly scale their products and avoid manufacturing setbacks that crush growth.
4) A deep understanding of product-market fit
While Resonado’s final product is still in development, they have deeply investigated the industries that their flat core speaker will disrupt. Already, Resonado has identified applications in mobility, home, consumer, and industrial settings for their technology. By deeply understanding the needs of the customers in each segment, Resonado is poised to develop the exact right product for their target market.
Overall, we are extremely impressed by the groundwork the Resonado team has laid to create a successful hardware startup. We have little doubt that their revolutionary technology will make an impact on the market, and we are proud to share the journey with them!