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What Should Everyone Know About Startups
What Should Everyone Know About Startups
What Should Everyone Know About Startups
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StartitUp - Start a Startup has a pretty complete step-by-step guide that illustrates steps
every startup need to complete to lay down their fundamentals, to grow, and to get
funding.
http://www.quora.com/How-do-you-start-a-hardware-startup
Isham Dh
Edit Biography Make Anonymous
Let me cover a few points as the Founder of a hardware start-up and as a NPI
professional that has brought over 30+ hardware products to consumer release for major
companies.
1) Costs: Hardware startups are only slightly more expensive then software start-ups.
My consumer electronics startup is on Version 10 Rev 3 for PCBs and I am on Version D
of my plastics. Including components and plastics I am out of pocket for about $2K for
hardware related costs. I have also worked on high-speed telecommunications (Fiber to
the Business) and a cellphone startup. In both cases the hardware required to get funded
was less than $5K. Yes the costs go up when you get ready to go to production (probably
another $10K-50K for tooling and approbations), but that is not like the millions of
dollars that hardware startups used to cost.
2) Lean, lean, lean: Let me say that again Lean. Lean startup practices are a
MUST for hardware startups. The leading cause of hardware startups failing is not
getting market/product fit prior to paying for tooling. Your design is probably going to
change so dont pay for tooling and such until you are sure you have product/market fit.
Build a few, get customer feedback and iterate. The margins are probably going to suck
at first, but you can absorb the costs into what (should) be the distributor and/or
wholesale markups.
3) Avoid China (at first): People are going to try to pressure you into producing in
volume and going to the Far East to get the best price. This can be THE KISS OF
DEATH! It is stupid and introduces so much more risk to your company. Going to China
(or Thailand or Vietnam or Malaysia) is for high volume products that have a welldefined manufacturing and testing process. It is a cost reduction effort, not an NPI route.
Never have your product built for the first time ever at a factory that you cant drive to in
less than a day if there is an issue (and there will be issues).
4)
Never buy more than you know you can sell in a reasonable
timeframe: A lot of start-up costs are in inventory. Most people buy more than they
have orders for (or at least honest forecasts) due to high MOQs (see 3), driving the price
down to profitable levels, long lead times (see 3 again) and/or being overly
optimistic. Inventory ties up capital that could be better used elsewhere and also
reduces agility as it is very costly to scrap or rework product that has already been
produced. It also costs money to ship and store and can cause accounting nightmares.
You can also order low volume components through places like Mouser and Digikey. Just
watch your lead times on some items as there are components that have 16 week lead
times.
5) DIY: Learn to make do with what you have for prototypes and low volume
production. There are plenty of low volume/cost batch PCB processing services ( I
personally use OSH Park ~ Welcome), frameless cut metal stencils and a rewired toaster
oven (Page on instructables.com). Yes it is a pain placing parts by hand. I can place down
to 0402 and QFP by hand without to many problems. BGA are hit and miss and you will
probably need a low volume assembly house, but those are easy to find.
One final note: I am about to launch my first Kickstarter next months and it
represents a large capital investment. Both the photography/video and advertising
budget are pretty substantial ($2K total and I might be increasing my ad budget). Dont
think of it as some free magic bullet that will take care of your funding problems. Make
sure you have enough cash on hand to have pretty high production values as well as a
decent marketing plan that you can execute.
Written 11 Aug, 2014. 1,215 views.
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This is a difficult question. First I would say: every successful company has its unique
character and its unique start-up story. And this is not Electronics & Communication
specific, for any business that sells real physical (not digital) stuff, it requires lots of
money.
While I believe things are getting easier these days. As KK said, "you are not late". (You
Are Not Late) Hardware startup in 2014 is never as easy as before:
1. quick prototype
Think about you want to build a Bluetooth device prototype in 2004, where can you find
the ICs, how do you design the schematics, who will manufacture that for you. Now it's
getting really easier: you can use 3D print to print a mechanical housing. You can
download Eagle EDA tool to design your own PCB. And the you can buy off-the-shelf
components for open-hardware communities (like Seeed Studio Bazaar).
After design, there are places to make, build, create. For example TechShop. (TechShop
is America's 1st Nationwide Open-Access Public Workshop) And many similar
communities like TechShop.
2. incubators and accelerators
Some investors now focus on hardware startups, so they not only provide $, but also they
serve with incubation services. Some of them provide not only engineering guidance, but
also marketing, business side ramping up.
And some top tier manufacturer & supply chain company also provide incubation and
acceleration services to start ups. Highway 1 from PCH is an example (Highway1).
3. crowd funding
When you have an idea, then a working place, then a prototype, where to test your
market? Crown funding community is a perfect place. Kickstarter (Kickstarter) is one of
the best community for hardware startups.
If you successfully achieved the above 1-2-3, I believe you already are in good business.
This road is what I am walking along with my team. It is really interesting.
Written 10 Aug, 2014. 499 views.
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Joel Burke
2 upvotes by Rupert Baines (Founded several start-ups, exec at several more... (more) ) and Manish
Adhrit.
I'm glad you've already acknowledged that it is going to be both costly and difficult.
Hardware is definitely a whole different ball game than a software startup, however there
is still great upside potential especially when the two are coupled together.
I would say the basic tenets of creating the startup are the same, have an idea, make a
plan, test its viability, etc. However, the difference with the hardware is that you are
probably going to need more capital and create more relationships in fields like
production.
If this is your first startup, I would suggest looking in to going to an accelerator program
that specializes in Hardware development and using their advice and methodology to
build up.
Written 11 Aug, 2014. 374 views. Asked to answer by Stephen Doo.
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