Hardware is Hard: Some Lessons

While I agree with all of the points you make, I think it still misses the biggest reason(s) running a hardware company is actually hard…

  1. Building hardware requires a number of additional operational resources that software companies don’t have to fret about. Things like logistics, supply chain management, warehouse/fulfillment, prototyping tools, etc.
  2. You still need to be good at all the other things every other VC backed startup is expected to be good at… marketing, sales, design, customer service, technical support, etc.
  3. Traditionally VC’s rallied around big preorder campaigns that promised early delivery of a conceptual product. So entrepreneurs (like myself) were encouraged to be “lean” and get early traction before fully developing a product.

The last 5 years rewarded hardware companies that went to market early, had preorder success, but then they either failed to deliver entirely or delivered a sub-par product.

Many of these companies — like Lily — were handsomely rewarded for selling a concept for a retail price below their final COGS and gaining early customer traction, but then couldn’t get the product off the ground or make the economics work (or both).

The market should shift towards encouraging product development before going to market, not rewarding those with early traction and no product. Selling vaporware is easy, selling the actual product is way harder.

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