Bengaluru and San Jose-based SuperSuit, maker of the world’s first wearable gaming platform which received much adulation and encouragement from the tech press and investors, has decided to shut shop. According to sources, SuperSuit is winding up its operations and trying to sell its intellectual property (IP) as it was unable to raise more funds.

Earlier, the company concluded its Indiegogo pre-order campaign, raising only $32,693, less than half its target of $110,000. The campaign, which was launched in September 2016, had announced that SuperSuit, which costs $199, would be shipped to early backers by April 2017.

The startup had launched its wearable product at the Consumer Electronics Show (CES) in January 2016 amid much fanfare.

The founders have already started informing the investors of their plan to wind up operations. FactorDaily reached out to the company’s founder, Rajat Dhariwal, for comments on the development but we’re yet to receive a response. We shall update the post as soon as we get one.

The product

The SuperSuit platform was powered by the company’s proprietary ZiFi technology. ZiFI is a standalone wireless mesh network that allows the gaming suits to communicate with one another and their natural gesture processing engine, ENGaGE. The company had plans to build a SuperSuit software development kit (SDK) for game developers that would enable them to develop their own custom games on the platform.

SuperSuit had also made some high-profile hires, including Alice Brooks, founder and CEO of toymaker Maykah Inc, and Rajiv Patel, owner of product development studio Lift Projects, as their head of design.

Cash crunch

The company, formerly known as MadRat Games, has so far raised a total of $2.5 million in funding. Investors like Ratan Tata, Ola’s Bhavish Aggarwal and Ankit Bhati, and Freshdesk’s Girish Mathrubootham took part in its latest funding round in June 2016.

Earlier, in November 2014, Flipkart’s Sachin Bansal and Binny Bansal had, along with others, invested $1 million in SuperSuit. This was followed by Snapdeal’s Kunal Bahl and Rohit Bansal investing $168,000 in the company in July 2015. It had also raised more than $500,000 in venture funding from Blume Ventures and First Light Ventures back in 2012.

Despite these rounds of funding, SuperSuit required more money to complete product development and to commercially launch its product in the market. But, it failed to attract further investors, especially in the US, which was its planned launch market.

The failed Indiegogo pre-order campaign, which fell miserably short of the $110,000 it wanted to raise, was the final setback, prompting the company to wind up its operations.

Why Indian hardware startups are struggling

SuperSuit is not the first hardware startup that is having to quit the game midway. The Indian startup ecosystem has never been conducive to hardware startups. Getting investors and good talent onboard, hardware sourcing and prototyping are some of the problems plaguing such startups here. Finding early adopters for products has also been a problem.

These companies are also struggling to understand the market and are not quite there as far as product design is concerned. A lot of the products that come out of these startups lack design finesse and are often clunky or plain goofy as compared to their international counterparts.

Getting the product right is imperative, and if your product design is not right there’s no way it will sell. Take the instance of Kochi-based RHLvision, founded by Rohildev N, which had launched a smart wearable Bluetooth ring in 2014 through an Indiegogo campaign. The company raised more than $200,000 from the campaign, while also raising venture funding. When the product was finally launched in 2015, it looked and worked nothing like what the founders had envisioned — it was just an oversized ring-shaped trackpad. Eventually, the startup had to shut down. Founder and CEO Rohildev N has left the company, according to his LinkedIn profile.

Another Bengaluru-based startup, Notion Ink, had a very promising tablet called Adam. One of the early tablets in the market, Adam was an ambitious product of its time. It saw multiple delays and controversies since its pre-order launch in December 2010. These problems included shipping problems, confusion over the specifications of the tablet, poor customer support and poor hardware and build quality. The result was that the company couldn’t deliver on the promise of its much-hyped product, and Adam failed miserably in the market. The company came over this setback and today retails its Windows-based Ultrabook called Able.

“Friends” in China key to success

The only good news for hardware startups is that prototyping, one of the initial stages of product development in hardware startups, is becoming easier with the advent of 3D printing and makerspaces across the country.

However, Yash Kotak, founder of Lumos, a Bengaluru-based IoT startup that was forced to shut down, is of the opinion that “building a prototype is the easiest part of building a hardware startup.” In a blog post about his learnings from the failure, Kotak writes: “The real challenge comes in product design, production engineering, manufacturing, distribution and marketing/ sales. And you need to have friends in China.” Lumos, which was founded in 2014 by IIT-Gandhinagar alumni Yash Kotak, Pritesh Sankhe, and Tarkeshwar Singh, had to wrap up operations in less than a year as it couldn’t sell its product.

Kotak is right about China. The best quality products in the world today are manufactured and assembled there. To deliver high-quality products, companies (across the world) have no option but to establish a network for sourcing and manufacturing in China. They also have to be able to import components and products through customs without much trouble. Most Indian hardware startups have so far been unable to do seamlessly.

“In India, vendors are few in number and production cost is high. Quality, even though it’s improving, is not yet at par with China. China remains the primary manufacturing hub and source of components for Indian hardware startups. There are thousands of vendors there who can deliver volume at a fast pace,” says Aman Kajria, co-founder I2U2, a hardware startup that produces telepresence robots.