From Idea to Market. How to build a hardware startup

THE WORLD IS OURS TO MAKE

FROM IDEA TO MARKET.HOW TO BUILD A HARDWARE STARTUP

Agnieszka Nazaruk@agaonfire

What do these have in common?

Just a few years back, they would have taken a corporate empire to

design, build and market these products + a looooot of cash...

Thankfully you don’t need that in 2015...

The difference between a project and a product is the difference between

making one and making many

6The 3rd Industrial Revolution IS UPON US!

01 RAPID PROTOTYPING AND SMALL BATCH MANUFACTURING

03 GROWING HARDWARE ECOSYSTEM

02 CROWDFUNDING AND MORE VC FUNDING

04 ONLINE COMMUNITY

05 AFFORDABLE SUPPLY CHAIN

„Hardware is the new software”

Erick Schonfeld

01 RAPID PROTOTYPING AND SMALL BATCH MANUFACTURING IS EASIER THAN EVER

02 RISE OF CROWDFUNDING AND INCREASED HARDWRE FUNDING

$529 million pledged towards successfully funded projects on Kickstarter in 2014.

03 HARDWARE ECOSYSTEM IS GROWING

04 SUPPLY CHAIN IS BETTER, CHEAPER, FASTER AND EASILY SCALABLE

05 ONLINE COMMUNITY

Welcome to The NEW, Programmable World of HARDWARE!

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14

YOUR HARDWARE ROADMAP

FUND SHIPPROTOTYPEIDEA

MVP DFMMFP

BUILD$

HOW HARD CAN IT BE?

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17HARDWARE ROAD MAP

FUND SHIPPROTOTYPEIDEA BUILD$

SCALE

ITERATEITERATE ITERATE

BUILD COMMUNITY (Email, Social Media etc)

BRANDPOSITIONING

USP

PITCHINGPR

RELATIOSNHIP WIH BLOGGERS,

JOURNALISTS AND INFLUENCRES

LAUNCH!

VALIDATE

FIGURE OUT HOW TO KEEP ON SEELING!

DISTRIBUTIONFULLFILMENTFUNDRAISING

NEW RULES OF THE GAME

20

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HARDWARE IS NOT SOFTWARE

Skills Development Cycle Cash

21

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Start with IdeaLorem ipsum dolor sit

amet, consectetur

PrototypingIndustrial DesignFirmwareGerberCAS

MarketingPR BrandingVideo

TestingSourcingNegotiationAssemblyToolingQuality Management

FundraisingFulfilment Distribution

22

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VS

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Hardware is a CASHFLOW BUSINESS

It takes money to get to the market and even more money to scale your

company. This means that your funding strategy is second priority only to

creating an amazing product.

Marc Barros, founder of contour

24

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+

$10M +

-$25k

Friends & FamilyGrants

Seed

Series ABridge

of DeathCrowdfundingCROWDFUNDIN

G

$100k-

$1mln

Accelerator

$25-$500k

%

$$$

time

Pre-orders

Debt

IDEA

HARDWARE ROAD TO SUCCESS

$

A Winning Hardware Idea CHECKLIST

BUILD THE RIGHT THING

The question is not any more whether we can build it but whether what we are building is worth while

Cyril Ebersweiler, HAX

Source: http://www.slideshare.net/haxlr8r

HW+ SW+ Community

We make growing really, really simpleWe’re focused on what’s importantYOUR CROP

HARDWARESOFTWARE

COMMUNITY

THE ARC

Build an Experience not a Product!

PROTOTYPE

HARDWARE ROAD TO SUCCESS

$

PROTOTYPE

MVP MFP DFMMinimum Valuable

Product Minimum Functional Prototype

Designed For Manufacturing,

assemble, test and cost

MINIMUM • Build it at home – use Alibaba, maker

spaces, laser cutters • Stock up on duck tape • Use ready made solutions• Iterate with customers as much as

possible – both look alike and work alike prototypes

YOU DONT GET A SECOND CHANCE

Iterate like your life depends on it

FUNCTIONAL FULLY INTEGRATED WORK ALIKE and

LOOK ALIKE PROTOTYPE WITH DESIGN INTENDED

TO BE PRODUCTION

READY

MANUFACTURING READY FOR

Welcome to manufacturing madness

„NO HARDWARE SURVIVES CONTACT WITH THE FACTORY”

CYRIL EBERSWEILER, HAX

Source: http://www.slideshare.net/haxlr8r

Source: http://www.slideshare.net/haxlr8r

SHENZHEN, CHINA“All Hardware Lead To Shenzhen”

Welcome To Silicon Valley For Hardware:

PROTOTYPE FASTER

&BETTER

ALL THE COMPONENTSYOU

MIGHT EVER NEED10 Minutes Away

from The Office

INTEGRATEDSUPPLY CHAIN

“China has the MOST COMPLETE integrated supply chain which will scale you all the way to

$1billion compay”

DEVELOP RELATIONSHIPS

WITH FACTORIES

CENTURIES OF EXPERIENCE

“Factory Engineers can look at a product and

tell you if what you have can be made and how to

do it” – Bunnie Huang, Hardware

Hacker

FUND

HARDWARE ROAD TO SUCCESS

$

$

It’s NOT ONLY ABOUT MONEYVALIDATION SOCIAL PROOFCOMMUNITY

BUILDING

Lessons Learned

FACTOR IN COSTS AND DELAYSCHECK YOUR MARGINS, FUNDED DOES NOT MEAN PROFITS

PREPARATION IS THEY KEY

MASTER THE ART OF LAUNCH, PR and MOMENTUM BUILDING

YOU HAVE 4 hours!

BEFORE LAUNCH

CROWDFUNDING CHECKLIST

#1.

BUILD A STRONG COMMUNITY

150k Beta Testers prior To campaignSkully. $2.4 mln

#2. CONNECT AND LINE UP

JOURNALISTS, BLOGGERS AND INDUSTRY INFLUENCERS

100 Bloggers on board

24k Journalists Contacted

10 Media Appearances

5k email List1 Private Group For Supporters

1 Full time Assistant

#3. KNOW YOUR NUMBERS

Be 100% sure you can build it and KNOW HOW MUCH IT WILL COST!

Factor in ALL the costs + DELAYS COGS /BOM

ManufacturingShipping + Distribution

FUNDING FORMULA

# EMAIL SIGNUPS

AVERAGE PLEDGE

CONVERSION RATEX X

= FUNDING GOAL

FUNDING FORMULA

# EMAIL SIGNUPS AVERAGE PLEDGE CONVERSION RATEX X

= 100k

FUNDING GOAL

X $200 10

ANATOMY OF A 100k KICKSTARTER PROJECT

$100k - $5k (Kickstarter Fee - 5%)

- $5k (Amazon Payment Fee 5%)- $30k COGS (1/3 of sales)

- $20k Tooling= $40k for a team for a year

+ Other costs Certifications, Returns, Fulfillment, Marketing

Ultimate Guide to Launching a Kickstarter:

How to have hundreds of blogs lined up on the day of launch

Access our launch emails, email templates for journalists, bloggers and more

How to Build and use your community to optimize for virality and shareability

Step by step blueprint for crushing your goal:

http://sheisonfire.com/kickstarter

Source: Hax.coSource: http://www.slideshare.net/haxlr8r

BUILD

HARDWARE ROAD TO SUCCESS

$

But.. Expect the Unexpected to

Happen

SHIP

HARDWARE ROAD TO SUCCESS

$

Distribution Certifications

RetailOrders fulfillment and inventory management,

Shipping, Returns and support

ULTIMATELY, ITS NOT ABOUT LOGISTICS, ITS ABOUT

YOUR BUSINESS STRATEGY

SCALE

HARDWARE ROAD TO SUCCESS

$

SHIP FAST, SCALE SLOW

73

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$10M +

-$25k

Friends & FamilyGrants

Seed

Series ABridge

of DeathCrowdfundingCROWDFUNDIN

GAccelerator

$$$

time

Pre-orders

Debt

THE RETAIL CHASM

SCALING REQUIRES HEALTHY CASH FLOW , OTHERWISE YOU MIGHT END UP SCALING A MONEY-LOOSING

BUSINESS

Benjamin Joffee, Hax.co

Source: http://www.slideshare.net/haxlr8r

76BIGGEST HARDWARE LESSONS

01 BUILD THE RIGHT THING

04 KNOW YOUR NUMBERS

02 CASH IS THE KEY

BE IN FOR A LONG RUN05

GET HELP03

DO IT! THANK YOU

agnieszkanazaruk@gmail.com@agaonfire

www.sheisonfire.com/kickstarter