4 Pitfalls That Can Sink Your Hardware Startup
You’ve probably heard of hardware startups that struggle to get their product to market or worse, launch only to see things start breaking. In this article, I’ll share some of the most common pitfalls I’ve seen firsthand.
Pitfall 1 - Lack of Technical Expertise
This is something that needs to be talked about because many hardware startup founders suffer from the “Apple Syndrome”.
Common symptoms we hear are “We are the next Apple”, “ I’m the next Steve Jobs” or “We will sell millions in the 1st year”.
While we do appreciate a founders strong enthusiasm, reality can be bit different.
When you are developing an electronic product it will involve people from many different disciplines, such as engineering, software development procurement.
You will need someone in your team that has gone through this process several times and understands the complexity of product development and how to manage engineering failures to get back on track.
If you only want to surround yourself with “Yes” men you will fail. What you really need is a person telling you what is doable and what is not doable, someone that can point out risks and challenges for you.
Hire someone who has experience and that can lead a team!
Pitfall 2 - High Manufacturing Costs
There are several different reasons why manufacturing cost gets under estimated.
We’ve observed many founders trying to estimate their cost prior to development by comparing their product idea with similar products on the market.
Many founders like to over-spec their product, adding features that aren’t really needed or select components that are too expensive.
This all leads to higher complexity and production cost.
Adding features during development, aka “Feature Creep”, not only leads to higher cost but will also affect development time.
More prototyping and testing will be needed fueling to the overall development cost.
Many years ago a founder told me that we can manufacture their wearable for $50.
I asked how they came up with that number and their reply was “ Well, Apple manufactures the Apple Watch for 30 bucks so our wearable will have a slightly better screen, so $50 should be doable”.
First, the cost estimation for the Apple Watch was pure fantasy and second, having a better screen is not necessarily needed.
Be careful when making estimations and assumptions!
Pitfall 3 - Product BETA Testing
Not only should you do validation and verification testing but also conduct testing with real customers. Plenty of product features can fail in real life scenarios.
This can be either usability or a design flaw that could not be detected inside an office or lab environment.
If you don't do enough verification testing before production you will be thrown back to the drawing board. You're launch schedule will delay and extra cost will occur.
Don’t rush your launch!
Pitfall 4 - Mismanagement of Funds
