4 Things That Will Make or Break Your Hardware Business

Building products is hard, building hardware products and taking them to market is nearly impossible. In the past three years of growing Wearable World I’ve worked with over one hundred hardware entrepreneurs and, together, we’ve stumbled through a dragon’s den of unique-to-hardware challenges.

As sensors and microprocessors have become cheaper and smaller, connected device startups have been cropping up left and right, triggering a mad rush to get products to market. Entrepreneurs feeling the pressure to get out in front of competition, and retain more equity, turn to quick sources of cash like crowdfunding, then often struggle to produce a prototype that passes muster when it gets to manufacturing.

In light of this, I feel compelled to take what we’ve learned and add a bit of structure to the mayhem of bringing a hardware product to market. Along with my Wearable World team and a world-class partner, Jabil, we’ve created a framework that wearable and Internet of Things (IoT) entrepreneurs can follow to avoid common pitfalls and streamline their go-to-market process, and we’re holding a conference for hardware entrepreneurs on October 13 and 14 to help them learn about it.

We are calling this framework as well as the conference “e2e,” for “end to end.” It’s the design-to-manufacturing process checklist for hardware products. So far we’ve come up with four major steps hardware entrepreneurs need to take to win at the hardware product game.

The Four-Step Go-to-Market Process

e2e is an integrated alternative to a commonly used but disjointed approach in which entrepreneurs conduct each part of the product development process independently. They make the mistake of handing their product off to the next expert in line without effectively integrating best practices from each step.

Entrepreneurs and corporate innovators can avoid traps that make a product more difficult to manufacture and scale further down the line, by taking stock of as many challenges as possible from day one and continuing to revisit them and incorporate new information as the process unfolds. This helps them avoid expensive and time-consuming manufacturing delays, cost overruns or embarrassing patches.

There are four steps involved in the e2e process of readying a product idea for successful full-scale production.

Design for Manufacturing Value Engineering Prototyping Scaling

1. Design for Manufacturing

One of the biggest mistakes hardware startups make is ramping up production while they are still validating their design. ← Tweet This

Many design houses worry that getting manufacturers involved in the initial design will confuse the process and stifle creativity. But if designers and manufacturers work together and provide feedback to each other throughout the design process, a stronger product will be created on a shorter timeline.

This approach helps entrepreneurs preempt problems encountered at the time of manufacture and scale. Rather than doing the CAD work and having a manufacturer point out issues raised by the design after the fact, this approach engages manufacturing experts from day one.

Say you have a molding issue. An industrial designer could devise a solution, but what if the solution affects your ability to source a key component from the manufacturer you had planned to use? Or what if that solution unexpectedly puts your bill of materials over budget?

It’s all about creating accountability in design for manufacturing from day one.

What to do: Engage a manufacturing partner that has the talent and capabilities to provide valuable guidance in the design and prototyping process, and get them involved in the design brainstorms. Some partners have research centers and advanced prototyping capabilities co-located in their manufacturing facilities. This way the manufacturer can build the first 500 units and address issues before attempting to scale.

2. Value Engineering

Once you start designing a hardware product and considering manufacturing costs, the tradeoffs come very quickly. ← Tweet This

To balance the integrity of your design with a bill of materials that makes sense for your business goals you must get value engineers involved early in the process. Value engineers look at use cases, anticipate costs, and offer solutions that balance efficiency with maintaining design integrity.

Hardware logistics decisions are largely driven by where you expect to sell your product. You should plan to scale it where it’s going to be sold, and to have designers who are familiar with the nuances of that culture. When you consider that, at scale, the effects of unexpected changes can add a great deal of cost, it’s important to use tools to track data on everything from the cost of oil to the potential cost of a tsunami.

What to do: Take time early on to determine who your target customer is and the price they’re willing to pay. And don’t forget that the customer isn’t Target or Amazon — it is the consumer who will use the product on a day-to-day basis. Then, consider options for lean assembly, packaging and logistics. This reduces the number of cycles you have to run to get your product to market and lets you focus on the next generation sooner.

3. Prototyping

When creating a hardware prototype you must ask, “What problem am I solving and why this solution?” ← Tweet This

Without considering user experience and the real-world needs of potential customers, you risk creating a product that no one really needs. Google Glass is a great example of an objectively good product in search of a problem.

Creating prototypes for connected devices has opened up a Pandora’s Box of new obstacles. The Internet of Things is taking us into uncharted manufacturing territory. We are putting electronic components on plastic, 3D printing, using conductive adhesives instead of the hot soldering process of traditional manufacturing — just to name a few.

With these increased demands and ever-present time constraints, it’s key to have access to a prototyping facility where manufacturing engineers and supply chain experts help finalize designs, find the best vendors and choose components to turn around prototypes in a matter of two to three days — without cutting corners.

Technical complexity can cause delays that may risk your product’s market success, which is why it’s critical to consider scaling when making a prototype. Some features or parts might make sense at the low-production prototype phase, but will you have the funding in place to produce them at scale? Will the materials be available long-term from qualified suppliers, so you can avoid hiccups when you go into volume production?

What to do: Have a dedicated, specialized team to do human factor development, because in the world of connected devices, user interface and user experience is crucial. Get to know the majority of your use cases and build a prototype that addresses them.

4. Scaling

Though scaling comes after you’ve designed and built your product, it’s crucial to consider the demands of mass production throughout design, value engineering and prototype building. ← Tweet This

If you’ll build a product for the Korean market, where will you source the parts, and what will that mean for shipping costs and time? Consider that the size of your product can create issues in scaling. For example, an antenna can become an issue at smaller sizes. Even a decision that seems innocuous like shrinking your device can add a lot of time, cost and effort in scaling and bringing the product to market.

What to do: Try to co-locate front-end design and back-end production within a unified team, in one place, if possible. This will reduce turnaround time on bill of materials validation, and will enable you to test the product, perform value analysis and supply chain optimization, and design production volume tooling for quick and seamless transfer to the production facility.

Pairing Inspiration with The Right Partners

Entrepreneurs and startups can enter this process at various stages. While some have an idea and are looking to find funding, others may already have investors, whether it be VC firms or crowdsourcing.

In either case, it’s crucial to find partners who understand the needs and requirements of bringing an IoT product to market. While sites like Indiegogo give people a chance to chase their product dreams, battle-tested partners, including the right investors, and a proven process give entrepreneurs a higher probability of turning these dreams into reality.

Crowdfunding proves a market for early adopters, but the money raised goes towards getting your initial orders out. How will you have the funds for a much larger, second run? It’s absolutely critical to work with investors who are familiar with what it takes to source components, build a supply chain, control the costs of your bill of materials, and scale. This way you’re more likely to get the necessary time and funding to get it right, rather than rushing into ill-informed product decisions that produce a downward spiral of delays and disappointed customers.

Being affiliated with a respected hardware accelerator opens doors with these types of partners from investors to suppliers, design houses, and manufacturing services firms. Beyond that, an accelerator or incubator can also be a great source of advice and expertise through mentoring, events and other educational opportunities. Of course, it’s easy for me to say this, since I run a hardware accelerator. Take what I have to say here with the requisite grain of salt — but also know I wouldn’t have put in the blood, sweat, and tears into starting Wearable World if I didn’t believe it was true.

The right partners, paired with a disciplined go-to-market process, not only help startups create the very best design, prototyping, manufacturing, and supply chain plans, but they can also lead them to the best investors.

While today’s hardware startups are born of inspiration and grit, they thrive on proven methods and carefully chosen partnerships. To learn more about where to seek advice and expertise on bringing a hardware product to market the right way, join us at the e2e Conference happening October 13th-14th at Jabil’s Blue Sky Innovation Center. Get your tickets now!

PS — If you’ve read to here I’m guessing (and hoping!) you got something out of the post. For those of you who enjoyed it, I’ve decided to give away 5 free tickets (regular price $799 each).

For a chance to win one of the free tickets, I’d just ask you to tweet the article, including the link to the medium post, and use hashtag #e2e2015 so we can find you! I will pick 5 winners on Friday 10/9, look for a tweet from me then.

Redg Snodgrass — Co-Founder & CEO of Wearable World & ReadWrite — My team & I help founders build hardware products. Wearable World is an incubator for hardware and IoT startups and an advisory partner to later-stage companies investing in innovation. ReadWrite is a media org leading the news on IoT. Connected devices are driving the next wave of technology innovation and we are having the ride of our lives on that wave.