5 Considerations Every Hardware Startup Should Nail
At Lexicon Design we work with a wide range of clients, from "solopreneurs" to Fortune 50 companies. As creative problem solvers we thoroughly enjoy helping all of our clients advance their strategic goals through design. Over the years we have seen a number first-time hardware startups (and some large corporate clients) hit roadblocks that can be avoided by considering the following factors when jumping into a product development cycle:
What's the Plan?
As in any successful endeavor, having a plan is a prerequisite. This is especially true for hardware startups as the cost, timing, and logistics for bringing physical products to market need to be considered and planned.
Determine who is your customer, and in what markets your product will be sold. Where will it sell? Explore when your product should be launched in order to be successful (Is there a key trade show or release date based on an industry calendar or cycle?). Understand the budget requirement for research, design, engineering, testing, certifications (if needed), marketing, sales, production order(s), QC, etc. Do you have that much cash available now? If not, where will the funding come from? Does it matter where the product should be manufactured? What is the necessary profit margin to be successful?
Having a game plan is critical to success! Fortunately there are many great resources to help startups navigate these questions such as local Small Business Development Centers (https://www.sba.gov/local-assistance/find/), startup incubators, and business consultants. The good news is that plans can and should change as you learn, pivot, and progress with the launch of your product.
Know Your Enemy (or Frenemies)
Before embarking on a new engineering or design effort, it is critical to research the market space where your product will be competing and to know the key players. Some of the questions to consider are: Who will be your competitors and how will you differentiate from their offering(s)? What is the value proposition your product offers? Is the market for your category of product growing or contracting? What are the key patents and intellectual property held by the competition (or others) that you must navigate to bring your product concept to market? What is the likely response of the competition if your product disrupts their business model? How will you maintain your competitive advantage?
Understanding industry trends (reading trade journals, attending trade shows), listening to prospective customers, and talking to retailers will be crucial to developing a well rounded picture of the market and competition before diving into development. If a deeper dive into the patent landscape is necessary, seek out a patent attorney and consider commissioning a Freedom to Operate analysis (FTO) to make sure your concept can be brought to market without the fear of patent infringement and lawsuits.
In some cases the research may suggest that the patent space is too narrow, the timing is not right for the market space/category, or that the customer you initially wanted to target is in fact a different category of buyer than anticipated. Key early insights help avoid missteps and allow you to "pivot" early in the cycle before too much of your budget has been spent.
Know Yourself and Trust your Team
Entrepreneurs should be honest about their strengths and weaknesses in this new venture. Many founders try to wear every hat and take on too much. Consider the skill sets that will be required to successfully bring your product through development and out to the marketplace. Do you have the needed expertise? If not, who can you bring onboard to shore up your team?
Determine who will be handling marketing and sales, managing payroll, answering the phone during business hours (or after!), or handling QC and fulfillment responsibilities. This is why the business plan is so important; it will outline the key personnel required to bring the product forward. While there are always budget considerations with any startup and staff is one of the largest expenses, trying to take on too much is a sure way to hinder progress. One way to lessen the burden up front is to use consultants or freelancers. Don't choose the first options, be sure to do your research and find the best fit for you and your budget.
Don't forget that the people you bring on internally or as consultants are experts in their fields. After all, you hired them for a reason! Trusting them to do their best work sets you up for success and takes some stress and work off your plate. The more you trust them, the better your relationship will become and the more efficient your collaboration will be.
Timing is Everything
It's easy to get in the weeds in customer discovery and patent research, but oftentimes getting a product to market also requires good timing. When time is of the essence it is critical to have a solid team that can leap over hurdles and sprint like Usain Bolt. Having agile partners for design, engineering, and production will ensure the product hits the market at the right moment to capture the desired sales. Even with shorter lead times, it is important to make sure that the product has received enough iterations and testing to optimize the design for functionality, durability, cost, and other key metrics. Being quick to market doesn't mean having to putting out bad product. I've previously blogged about how to choose the right development partner and here is where it matters most.
Don't Forget Your Brand Identity
Having a great product design is (unfortunately) not enough to ensure success; it's important that prospective customers know that your product exists. Too often we've seen startups develop the branding and identity late in the game and have to play catch-up to alert their customers about the upcoming launch. Don't wait until a week before launch to start work on the logo, product name/graphics and website. Work with a design firm or branding and marketing agency well before launch so that these materials are available for social media use, press releases, business cards and letterhead, sell sheets and other pre-sales efforts. The logo will likely be used on the physical product so it is necessary to have all artwork ready before the product design is frozen. Make sure your customers recognize and credit you and the brand when they see the product online and out in the wild.
This is, of course, just a short list of key topics to consider when venturing into a hardware startup. Fortunately there are a great many excellent resources available to assist startups and we're always happy to make referrals to help out. Don't be afraid to ask!