The ultimate guide to bootstrapping hardware startups

June 18, 2014 by  
Filed under Solar Energy Tips

Involve others whenever possible

Find mentors and advisors. Tap people who you trust. Whenever you can, talk to people who have done this before.

Validate assumptions. Talk to at least 20 strangers about your product. Gauge their enthusiasm, listen carefully to their questions and don’t assume you have the answers yet.

Build the right team

Yes, you need a skilled team, but an entrepreneurial startup has to be stocked with risk takers. Look for resilient, persevering types who can keep each other motivated when frustration levels are high.

Take technical classes, get involved, and learn new things

There are really two factors at play here: what I call “microeconomics” and ”macroeconomics.” Microeconomics is things like your Bill of Materials (BOM) and Cost of Goods Sold (COGS). Own these numbers. Know that every penny counts.

Consumer products typically see a 3 to 4x increase to the shelf cost (ie. a microprocessor that costs you $1 more means the end price of the product needs to be raised by $3 – $4).”

Cost is key, figure it out early

Create cost estimates. Prototypes are expensive and so are the engineers who build them. At this point, a full Bill of Materials will not exist, but accurate cost estimation is still important.

Map your funding strategy. Cash flow is often the thing that makes or breaks hardware startups. A funding strategy can take many forms, (and of course will be considered more thoroughly when we get to “Fund”), but it needs to be on the table as early as possible.

Grandiose products, even at this early stage, will come back to bite you later if you can’t command top dollars when you sell them. Margins are business killers. I felt it first hand and it was ugly. It’s never too early to think about costs.

Build an experience, not a product

You are committing to deliver a physical product, and although we aren’t at “Prototype” just yet (that’s next), this is the time to sharpen your drafting pencils and contact with the outside world that will help you define the xperience you need to deliver in order to succeed.

Develop visual concepts of software, hardware and people coming together in several use case scenarios. Make them pretty, 3D renders, these are like ecstasy for the soul and they keep you going to keep you inspired.

Define your product and experience architecture: Design is nice, but what happens under the hood is more important, and as why people would bother to use it and how it translates to everyday use.

Define your software strategy. Be mindful of the Internet of things, APIs. Will you need to consider interoperability with other devices? Probably yes, so how does that work? How does it look like?

Engaging a professional team to help you build the product? Do it after you’ve defined the core of you invention, the desired experience and brand.

Over-communicate with your team and vendors; insist on “return on experience.”

Hardware, fun hardship

The allure of materials, finishes, colors and lights, software and utility all coming together is the magic many of us can’t resist. In the end, the world will have access to an invention that you came up with, so make sure you do this right, following the right steps and talking to the right people.

Want more? For further details on how to bootstrap your hardware startup, download the full guide, share or forward, then go build something!

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