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Helsinki Hardware Incubator
Hardware
Startup
Finland
8.9.2017
Hardware
Startup
Finland
Project Plan
Startup accelerators (and incubators) are quite common nowadays, and seems like every city has a handful of them. However, even though the existing players accept hardware startups in their programs, their offering does not take into account the very different needs of startups manufacturing physical products. Mentoring, resources and connections are geared towards service- or software startups, which means hardware startups are left on their own when it comes to tackling their biggest hurdles, most of them related to prototyping, manufacturing or distribution.
Hardware startup communities have started to form in the Nordics over the past years with the goal of at least bringing the entrepreneurs together, so that they’d have better odds of succeeding with support from their peers and cooperation. Even though hardware startups would manage to get past the initial prototyping and manufacturing challenges and find product-market fit, finding the distribution channels and partners is very difficult. In short, Nordics haven’t been able to offer the support hardware startups need to break through.
Despite our history of (electronic) manufacturing, hardware-specific accelerators and incubators are a rare breed. None exist in Finland, and there are only a few in Northern Europe.
Hardware
Startup
Finland
“Startup entrepreneurs are crazy people but hardware startup entrepreneurs are SPECIAL kind of crazy.”
- our Insight Assistant
What’s happened during the project?
• +70 interviews and meetings
• Hw-startups in different phases
• Incubators, accelerators, investors, other ecosystem players
• Benchmarking & research of the global situation
• Excursions: Shenzhen, HK, Tartu, Stockholm, Boston, (Berlin)
• Events, blog posts, instagram, Facebook
Hardware
Startup
Finland
1. University & business-campuses • platform, service providers brought together
2. VC-funded with equity model • motivation & commitment from the investor side
3. Non-profit/sponsored programs (biz-dev) • relatively short-term in relation to hw-product
development
4. Company in-house programs • rigidity, anti-agile
5. Co-working & workshop spaces • membership fee, no official program
Different models for accelerating HW-startups
Hardware
Startup
Finland
• Variety in teams, first timer students vs. ex-nokia engineers > very different capabilities
• Physical spaces/machinery and access to them
• Aalto Design Factory, Metropolia, garage development, outsourcing prototyping
• changing need for prototyping and testing equipment
• Financing in different phases
• cost structure that is very different to software
• afraid of selling products before they are ready
• loosing sense of urgency when you get first financing - where do you use the money?
• Preparing for manufacturing
• understanding your options, which capabilities you need, can or do they need to be outsourced
“Without the space and equipment from Metropolia we wouldn’t even exist”
Insights Observations / Startups
Hardware
Startup
Finland
• Startups don’t acknowledge their experiences from the programs
• Finding suitable service providers in Finland (startup-scale & -friendly) can be challenging
• Startups identify to their fields (cleantech, health tech etc.), hw is just a format
• How aggressive growth plans do startups have?
• Role of design and branding services?
Insights Observations / Startups
“Ex-Nokia guys make the best employees for us.”
Hardware
Startup
Finland
• Quality over quantity
• teams quitting or being kicked-out is alarming
• Competition for the deal flow - accelerators and incubators are a commodity
• Continuous critical assessment of the program
• often energy goes to running the current program, keeping it alive
• Keeping up the sense of urgency & relevancy
Insights Observations / Programs
“We got 800 applications via the website last year - one of them joined the incubator. We actively scout teams ourselves.”
Hardware
Startup
Finland
Notes from Shenzhen
Hardware
Startup
Finland
• Acceleration, acceleration, acceleration!
• Strong governmental support for maker-spaces and startups
• Both, manufacturing & marketing opportunities at your back yard
• “We get worried if teams are using the workshops too much” - go out asap!
• Easy to get lost on your own - both literally and figuratively - finding the right partners is essential
Notes from Tartu
Hardware
Startup
Finland
• “there is no viable business model for a (hardware) accelerator in Europe - public sector support is crucial”
• running cost will eat the fund
• competition for the deal flow - accelerators and incubators are a commodity - scouting Easter European and Central Asian startups
• from own workshops and engineers to Makerspace-model that supports itself with courses - startups rarely use the opportunity
• some already had a first version of physical product but actually needed more help with market-fit
• some really early in the idea phase
• topical help goes to waste when startups are in different phases and content is not relevant
Insights Observations from Buildit
Hardware
Startup
Finland
Notes from Things /Stockholm
Hardware
Startup
Finland
• Startups first - no ping pong tables, visitors need to bring value, industry partners don’t set the rules
• Started by “industry godfathers” with the idea that startups are children of the industry
• not an incubator, accelerator or an investor - startups pay for the membership, 25 % comes from industry partners
• value proposition: community, (prototyping workshops), industry pilots and potential partners
• Hosting the local Maker community and HW-community in the same premises
Notes from Boston
Hardware
Startup
Finland
• Hardware startups are not aliens, lots of hw-focused events & communities
• Second generation - first wave hw-entrepreneurs want to give back
• Investors are very market oriented, not necessarily looking for the most unique technologies
• Big efforts to match manufacturers and service providers with local startups
Hardware
Startup
Finland
• engineering
• virgin test market
• education, universities
• design tradition
• Tekes
SWOT Finland as homebase for hw-startups
• commercialisation
• slow pace
• lack of soft skills
• peer-pressure is missing
• small (non-existent) home market
• IPR transfer processes
• startup boom
• showcasing
• scattered field, chance for community building
• industry collaboration
• reliable manufacturing partners
• unused IPR
• teams are too engineering focused
• doing for Tekes, not for customers
• not using resources to their fullest potential, the scene won’t develop
• Byrocracy, nanny state
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
What’s there in the cold North for HW-startups?
Hardware
Startup
Finland
• Commercialisation is not our strong suit
• Design is also user testing and validation
• Are we too comfortable?
• Investing in hw is still rare and small scale
• It’s a tiny market - need to go, not just think, global!
• First success stories of hw-startups just starting to emerge
Hardware
Startup
Finland
• Traditional acceleration and incubation models are ill suited for hw-startups and very challenging to make profitable in Europe
• Big players like HAX, Bolt, Highway1
• though limited program, long term relationship (up to 2 years on-location)
• crème de la crème from the deal flow
• big funds behind
• Workshops are not necessarily the key offering
• making the first prototype can be “dangerously easy”
• to get to manufacturing, you need to have validation and funding
• Discussion with the traditional industries is just starting
• “Startups are children of the industry”
• what’s beyond hackathons?
• Unused potential in peer-to-peer, community leveraging - needs to be facilitated
What have we learned?
Hardware
Startup
Finland
• awareness & starting discussions - making the hw-stories visible
• expertise through insights - individuals, startups and organisations are starting to contact us
• started to build a global network
• peer-to-peer connections
What have we achieved?
Hardware
Startup
Finland
• Goals are still the same - helping Finnish startups make it, improve the odds of surviving - format is different
• developing and further establishing the community and network first
• deep-dive learning workshops (HAX as the first pilot)
• further developing collaboration with other communities, companies and event organisers
• grassroot & professional level activities
What next?
Hardware
Startup
Finland
• planning and promoting the 3-day HAX-workshop
• manufacturing themed event with partners like YOKA or Unseen Technologies
• Founder’s Dinner for startups further a long (international)
• informational and promotional blog posts and educational online-material
• organising the community: membership questionnaire, community manager, establishing regular events
• industry roundtable?
Roadmap for this autumn
Hardware
Startup
Finland
• Vision: We know all the hw-startups, and they know us, awareness amongst relevant players (startup ecosystem, companies, industry, universities, city) on a Nordic and Baltic level
• establishing permanence
• improve the quality of Finnish scene through educational events, valuable connections and tight-knit community with peer sparring
• first role models, giving back to the hw-community through us
• Biggest related hw-event organiser in the Nordics
• space & workshops - if need & opportunities arise?
Intermediate Goals
Hardware
Startup
Finland
• Insight report and benchmark analysis of hardware accelerators and incubators in Europe and globally made available online
• Short and long-term roadmaps for developing hardware startup activity in Helsinki. These roadmaps include an execution plan, and are ready for direct implementation
• For internal use: updated list of hw-startups and potential collaboration partners
Project Deliverables
