Ten Rules to Take Your Hardware Product From Concept to Market
I have been making hardware for the last 10 years, and the most common question I get asked is “I have a product idea; what do I need to make it a reality?” — the answer isn’t as simple as “hand me the CAD and Eagle files” — yes, the product is an integral part of bringing it to life, but many people forget that there is a lot more beyond the product that contributes to its success. Since I have answered this question so many times and have seen numerous products succeed and fail over the years, I created 10 rules on how to develop a product and get it into the market.
1. Write a good product requirements document (PRD)
This should be the first step you take in developing a product. There are many steps to writing a good PRD — they are outlined in this Wikipedia article. This document should help you identify aspects such as purpose, functional requirements, usability requirements, constraints, assumptions, performance metrics, just to name a few. These are questions that really drill down into more than just the overall picture of the product. By identifying them, you will understand what resources will be necessary to bring it to life. Additionally, this process will help you prioritize features according to their importance.
2. Build a business model canvas
I’m sure you have heard of a business plan. The problem with business plans is that you end up spending too much time writing it and not as much time executing it. And then, if you make changes in your idea and forget to update your business plan, it becomes outdated. Since new companies are always evolving, they shouldn’t waste their time with long documents, but rather work on an overview of each section of a business plan. That’s pretty much what a business model canvas is. This document will help you answer key questions regarding the feasibility of your business. Things such as who is your audience, how you make money, what is your intellectual property (patents, trade secrets, brand, copyrights), etc.
Note: Since I mentioned intellectual property… Here's a tip: It’s a good idea to hire a lawyer and protect your IP if you can — but do your research first on whether your idea can be patentable (you don’t want to pay your lawyer thousands just to find out you can't). If, on the other hand, you are tight on funds, sometimes it’s better to save the cash and work on your business model canvas while doing market research to see if people actually want to buy it before you spend too much time on the patent. There are also free online resources in case you want to file for the patent yourself.
3. Find a good product design firm
There are many design and prototyping companies out there that will take your product document and turn it into a physical product. You can just google "hardware development" and find several companies to help you. Of course, you can try Jaycon Systems, too (my shameless plug). Oh, and if you’re afraid that they will copy your idea, don’t forget that it is our business to build products for our clients, not to copy their ideas and run with them — our resources are allocated for R&D, not for supply chain development and advertising (and everything else that is required to bring a product to the market). Additionally, when you’re shopping for a development firm, make sure they understand the manufacturing process well in order to ensure that your design is totally optimized for manufacturing (also known as DFM).
4. Budget for a high-quality prototype
No, we don’t take equity in your idea in return for free prototyping and manufacturing, and I assure you that 99.9% of design companies will not take equity in your idea, either. We get hundreds of pitches for the latest and greatest gadget. The truth is that we have a high overhead with all the engineering talent and equipment that we simply can’t afford to work for free in hopes to get paid later. So the reality is that you will have to pay for the development costs. If you need to spend a bit more to ensure your prototype is designed for manufacturability, don’t think twice. A big reason hardware is hard — by that, I mean timely and costly — is due to all the revisions that need to be made as the production has already started. So for an average hardware product, expect to pay $50,000 to $100,000 for the R&D and prototyping. Also, keep in mind that it can take time, from 3 to 6 months. Oh, if you are out in the Bay Area, expect to double those numbers for a simple product.
5. Build a brand and a website
Now that you have a great engineering team like Jaycon Systems working on your product, it’s time to get a nice webpage together. You can use Squarespace if you are computer savvy, or hire a designer to do it for you for about $1,500-$3,000. Using ready-made templates with built-in e-commerce features will save you thousands of dollars since you don’t have to code anything from scratch. Remember, though: this is the customer-facing part of your idea, so don’t go too cheap! Spend some time and money to develop a cohesive branding, a beautiful logo, and a compelling website. In today’s day and age, if your website sucks, chances are that people are not going to bother looking at your product.
6. Get pre-orders
Now that you have a website, put it to work — start collecting emails and taking pre-orders. A lot of people will buy your product pre-stage at a discount or give you their emails for an extra carabiner, keychain, or t-shirt. If you’re still testing your product idea before spending thousands of dollars in manufacturing, this is a great way to gather early feedback from other people who may be interested.
7. Launch your product on Kickstarter/Indiegogo
Remember, the earlier the feedback you get before you go into production, the better. Launching your product on Indiegogo or Kickstarter can be a great way to gather that feedback. Just remember that these crowdfunding websites are good for consumer products; not that great for B2B or highly niche products as the demographics of both websites are mostly tech-savvy consumers, not companies. Derek Blankenship wrote a great article about Kickstarter, I highly encourage you to read it.
8. Throw a launch party
If you want to get pre-orders, you may want to consider having a launch party for friends and family. This will help get the word out that you are launching a product — people end up inviting friends to go with them, and these friends may tell other friends about it. Also, people love parties and may feel more inclined to pledge/pre-order because they enjoyed the party. I got to attend many launch parties, and it’s awesome to see the support that comes from friends and family when you’re pursuing something you love. Start your crowdfunding campaign an hour or so into the party so you can get initial traction into your campaign, and don’t forget to have a computer set-up so people don’t have an excuse that they will do it at home. You want maximum sign-ups in a short period of time during the beginning of your campaign.
9. Spend some money on advertising
Invest a couple thousand dollars into advertising on channels that are relevant to your target audience. If you are giving away diamonds, but no one knows about them, then no one’s going to take even one. Build a pilot Facebook advertising campaign (if it’s a B2C product) or LinkedIn campaign (if it’s a B2B product). If you get no traction, that may be an indicator that something has to change — your product or your marketing — before you go full throttle into production. You can expect to spend 30% of your gross margin on advertising to get you off to a running start. Don’t think of this as 30% from your bottom line; instead, think that you’re building an effective sales engine that will attract new customers for every product you sell.
10. Don’t try to do the fulfillment yourself
There are many fulfillment companies that can help you deliver your product to the end user — Jaycon is one of them. The age where you spend hours stuffing and shipping boxes are long gone — use your time to actually grow your sales, not to fulfill orders. Get a quote on fulfillment from your vendor of choice and roll it into your shipping cost. Your time will always be better spent on marketing and sales.
That's it! These are my top 10 rules I have developed from working on hundreds of products over the years. If you have come across something in your hardware development journey that wasn’t addressed here, I would love to hear from you and add it to my article — just comment away. I am always gathering feedback to refine my posts so I can help new entrepreneurs entering this space. If you have any questions about bringing your hardware idea to life, feel free to add me on LinkedIn and I would be glad to help you.
About the Author
Hi, I’m Jay, the founder of Jaycon Systems. I’ve been developing hardware ever since I can remember and love learning about disruptive technologies. In my blog I share with you tips on building great hardware products; my take on new disruptive technologies; and other random & relevant thoughts about tech and entrepreneurship. If you like my posts, don’t be shy — give it a nice round of applause and add me on LinkedIn, I’d love to connect with you.