At the Wearable Technology Show USA, I was on a panel discussion with Tom Emrich, Peter Li, Co Founder of Atlas Wearables, Darran Hughes, CEO of Lumafit to talk about how to start a hardware startup based on my experience with the Helix Cuff. In case you missed out, I wanted to share my view here. Starting a hardware startup can be difficult because there are so many factors involved in whether you succeed or fail. Capital and a special team that understands each process and function are critical for success.
Starting a Hardware Company
There is a lot more to a hardware company than you might imagine. Getting the company running requires a much different skill set than your typical startup. You’ll need a team of experts in mechanical engineers, electrical engineers, industrial designers, and specialists in supply chain, inventory, cash flow, pricing, marketing and sales. But you don’t have to hire all of your team from the beginning. You need to have an industrial designer and engineer in the beginning to sketch, brainstorm, and design your product. Having someone in marketing near the beginning is important as well. You need to understand if there’s a need for your product in the market and what marketing strategy you can use for it. Once you’re in the later stages of product development, you’ll really start to grow your team. An expert in supply chain management and cash flow management is critical. You’ll have a lot going on in these areas and need someone knowledgeable to manage them. Even before your product is ready, you’ll need marketing expert in your sales channel and familiar with your distribution channel. In hardware, it is critically important to have a core team member who understand the whole supply chain engineering and know how to work with the contract manufacturer.
There’s a good chance that someone has thought of an idea similar to yours. Because of this, it’s important to do a lot of market research. Analyze existing products and determine how you can stand out in your niche. With the Helix Cuff, we noticed that most wearable tech companies don’t focus on being fashion-forward. The wearable market is overflowing with fitness trackers, biomarkers, and smart watches, but there has never existed a wearable that effortlessly combines fashion and music solving a universal pain point of dealing with tangled headphones while trying to listen to music on the go. Our product stands out because we’ve combined fashion and technology.
I can’t overstate how important preparation is for a crowdfunding campaign. Some people think that all you need is a nice video, but that’s just the beginning. You need to exposure in the market to attract customers to your product. You need to communicate with who you know and early backers to spread the word. It’s critical that you’re transparent with your backers.
Once you’ve started your campaign, analyze where traffic is coming from and make decisions with your marketing plan based on that. If you’re paying for an ad that isn’t bringing traffic to your campaign, it’s better to turn your attention elsewhere.
Getting a hardware product to the market can take anywhere from one to two and a half years. When you don’t have an actual product for people to purchase, it’s challenging to keep momentum going. Involving your community is important. Reach out to influencers in relevant industries and get their support. We run giveaways to get new customers interested in our product. Running programs and leveraging other platforms will help you continue to grow your business.
Cash Flow Management
Another important aspect is a healthy cash flow for capital to run your company. This can be a difficult part and part of the reason to crowdfund. You’ll need to pay a manufacturing partner and capital for inventory. Hardware is more than just the product. It starts with the design and involves creating the product, inventory, cash flow, and marketing.
While this may seem like a lot to take in. Starting your own hardware company is incredibly rewarding. With enough preparation and endurance through the ups and downs, you’ll ride the amazing wave of entrepreneurship and have amazing experiences.
I’d love to hear from you. Comment on the blog if you’re starting a hardware company.