Hardware is hard: some lessons

There is a lot of chatter once again in blogosphere and twitter that hardware is hard. Every time a prominent hardware startup fails, this discussion comes up. Whether it’s Quirky or Pebble, or the latest casualty: Lily Camera.

Yes, hardware is hard. Frankly I find it a disservice when some people try to philosophize how hardware is just software wrapped in plastic, or that the commoditization of the value chain has made hardware easier to develop. None of it is true. Hardware is hard, and one wins by building products at scale around truly differentiated (and protected) technology, strong teams that know how to develop, manufacture, and distribute hardware products, and building brands and business models that can build affiliation beyond one-off sale.

Some additional thoughts below for hardware entrepreneurs:

  • Hardware is hard. Know it, accept it. Don’t be afraid, but by excelling at it turn it into a moat for your company.
  • Don’t promise too many features in your product. Keep it simple (and do-able), wow your core audience before a broad market, and expand in future iterations. Learn to get to market first before dominating.
  • Hardware takes time and money. Don’t underestimate. Don’t fool yourself, your teams, or your customers. Even Apple, Samsung, Nest realize that.
  • Hire manufacturing expertise early in your company, not when you start realizing shit is hitting the fan. This is especially true if even early volumes have to be produced at some scale to have decent gross margins. Scale up and manufacturing talent is harder to come by than you might think.
  • Don’t promise a delivery date until quite sure of it. Market does not forgive easily, and it is infinitely distracting (and problematic) when negative rumors start circulating in the zeitgeist about your startup.
  • Build a strong investment syndicate early. Celebrity investors, high net worth individuals etc sound fun, but they often can’t (and won’t) give you another year of runway when you might need it badly.
  • Just like a CEO should ‘always be recruiting’, she should also ‘always be fundraising'. Companies go out of business because they run out of money. Don’t be that person.

Related post:

Hardware is not ‘software wrapped in plastic’: https://medium.com/bz-notes/hardware-is-not-software-wrapped-in-plastic-9936cae91259

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