[Ryan Walker] may have written up his observations a few years ago, but the lessons are just as relevant today as they were back then. He shares five easy ways to sink your hardware startup.
It’s a reminder that while hardware startups are unique, there are basic business realities that still apply because the hardware itself is going to be only one part of a whole. These business fundamentals can be a drag, but it’s worth giving them some attention. But if that’s not your jam, no worries. As [Ryan] experienced, they will explain themselves one way or another.
A good one is skipping market research. Do customers actually exist for this thing? Or forgoing market testing — do the customers actually want it enough to pay for it? One of the worst things to be stuck with is a product that everyone likes, but nobody wants to buy.
Premature optimization is another good one that a number of our readers can probably relate to in one way or another. It’s one thing to buy a tool or a part that one doesn’t end up needing, but when that gets scaled up it can put a real dent in a fledgling business’s development.
We’ve also shared insights on what it takes to develop a product and get it out there, whether as a solo entrepreneur or as part of a larger team, to help nudge the process toward success.
Headline should have a “too” too. Please get to the too before you prove that two is prime, too.
Right you are! One of those missing words the eyes just slide right off of…
Relevant with Naya B.V. just going bankrupt and leaving nata create owners (and people who prepaid for float, also me, oof never doing that again) in the lurch
“startup” causes a cringe so deep that my skin unzips and my skeleton leaves my body. Call your business a startup is a 100 percent chance that I will not look at what your product even is. Also the last thing we need on this planet is more product.
Services then?
Anyone who wants to have a hardware startup should read “The Four Hour Workweek” by Timothy Ferriss.
He explains a lot of techniques for starting and running a small “hardware” business that’s temporary in nature, techniques that are directly applicable to the “hardware” that people are thinking about on this site.
From the book: Market research can be done with a couple of web pages and some google ad words. Put up a description of your product, have a purchase page, and when people go to enter their credit card/paypal information, have a page that says “this product is currently on backorder, if you like you can leave your E-mail and we’ll send you a notice when it becomes available”.
(Of note: This is legal so long as you don’t actually take the credit card number.)
This gives you a good sense of how many people would actually purchase the product, which is precisely the information you need when starting a business.
He also goes through resources that can make your business life much easier; for example, once you have the actual product you can outsource the warehousing, boxing, and shipping to another company. Of course this reduces your profit, but it also reduces your workload. A number of these resources exist for outsourced functions, such as billing/payment, customer service, and so on.
The book goes through one case study where a student on holiday in France saw some french sailor shirts that aren’t available in the US and she thought these would sell. She did the market research, had the producer in France ship shirts to the warehouse in lots of 300, had several rounds of this, noted that the big players started copying the design, and closed the business. Several months and a tidy profit.
Other than the hardware being different (and self designed by you), this model is exactly what a short-run hardware business should use.
Optimization is best left to future you, and this applies to the business as well. Once your product is selling well and the business is running smoothly, that’s the time to decide whether warehousing and shipping is better done in-house.
And of course, the general rule applies: if you want to start a business, research how to do that. It’s not difficult, but there are a lot of pitfalls that can ruin the experience.
I’m surprised at how few people are familiar with this book and Tim’s overall work. How books and podcast are a gold mine of dense real world information that most people on the planet just will never have access to without him. That’s such a good book for just getting familiar with the process and building confidence. Found it in 2013 and have VERY slowly been working up the skills and confidence start my own little business. Hardest part has been figuring out what I am passionate enough about to actually stick with it. Still working on that. That book is still good stuff to this day. Thanks for sharing.
I would be so pissed if you took my payment info, then told my you don’t have anything to sell. This is a really shitty tactic, regardless if it is technically legal as you claim. Although you have to be careful or you may be violating Privacy laws. You are leading the user to believe you are capturing PII (email, payment info, etc.) to make a transaction, but in reality there was never going to be a transaction and this is just marketing BS…
I don’t want to buy hardware from “temporary” sources. It just leaves a trail of abandoned tech junk, flash in the pan devices that can’t be relied on for a lack of support when they break, and no source for replacements if you come to rely on them.
Like buying a bunch of cheap off-brand wireless power sockets. They work for a while, then one breaks, and you can’t find the brand on the market any longer so you have to replace the entire set.
lets not forget the massive pile red tape and regulations you have to go through (unless selling from a Chinese webshop ..)
By now people should be familiar with the book “The Lean Startup”
– https://en.wikipedia.org/wiki/The_Lean_Startup
– https://steveblank.com/