7 Common Pitfalls for Hardware Startups and How to Avoid Them
You’ve probably heard that “the material is difficult”; mainly because hardware startups have to deal with things that software vendors don’t really have to worry about. This includes pesky details like “physics” and “battery management” and “general wear and tear”.
Hardware development is complex and difficult. Physical parts have tolerances, both in terms of size and material properties, and components get hot and their characteristics change when they do. Once you’ve designed a product, the manufacturing process itself poses significant challenges. Ensuring components are produced with the required precision and quality requires careful planning and rigorous testing throughout the process. Hardware manufacturers often work with multiple vendors and manage supply chain logistics, which can be resource- and time-consuming.
Hardware development is inherently much more expensive than software development. Developing a physical product requires substantial investments in materials, tooling, manufacturing and logistics. These expenses, combined with the need for multiple iterations of prototypes, can make the process financially risky, especially for startups with limited resources.
There are a lot of pitfalls, and as a hardware nerd myself (I founded a hardware startup, which I then spectacularly hit the ground at high speed, making mistakes that most people experienced hardware professionals would laugh these days), I’m always curious to find out how hardware entrepreneurs can avoid some of the common mistakes.
Sera Evcimen knows a thing or two about the challenges of hardware startups. She is a mechanical engineer and has worked in four startups, including satellite design, consumer electronics, setting up the R&D department for a fusion startup, and working on ion thrusters. These days, she’s an advisor for a big company she can’t name, where she’s working on soft robotics for human interaction, and she’s a featured mentor for startup accelerator Techstars. She even runs her own consulting firm to get started. She works on a podcast called The Builder Circle, where she breaks down the challenges and risks of building hardware businesses. Like I said, she knows her stuff and we discussed things to avoid when building gear.
Lack of concentration
As a startup, you are an organization designed for learning, and learning is sensationally exciting. But that has its drawbacks: as you keep learning, it’s tempting to try and chase every big opportunity that comes your way.
The mistake is to fall into temptation and lose focus.
“A lot of times it sneaks up on people because people have completely different systems that they’re trying to push forward,” Evcimen told me. “They say, ‘Oh, it might work in this app, and this app, and this app.’ Alternatively, a business can say, “Oh, it’s the exact same thing, but bigger” or, “It’s the exact same thing, but smaller. I think it’s very important to know that each variation of a product is just another line of products. Similarity doesn’t mean anything. Even if that’s true, you still have to have individual designs; you still have to manage your supply chain. And… you even have to develop multiple supply chains.
Smaller module may mean different chips. Different case may mean different molds and tools. Every small change can affect the entire product development schedule. Even something as simple as launching the exact same product in a different color can create significant bottlenecks.
“Working on multiple versions hurts early learning because you’re trying to do too much at once. You are already a small team, trying to operate under cost constraints and time constraints,” she said. “It also dilutes the understanding of the market: if you do your due diligence and your user and market research, you’ll start to get an idea of which one will potentially be the most lucrative, or which variant you can use to learn faster. By letting go of concentration, you will begin to slowly learn about each one. This means that you should bet on one, rather than chasing the one with the most potential.
And that can be a killer: startups raise money, then make a bunch of products, trying to push them all forward at once. If something happens in the production process, they’re stuck with a bunch of half-baked goods, absorbing funds along the way. It’s a spiral, and it’s headed in the wrong direction.
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