How to Web Conference 2014: How hard is the hardware business?

It’s the late ‘70’s all over again… and to be in the hardware business is cool once more. But now we’re not talking (just) about personal computers but personal smart objects that almost anyone can build, thanks to open source hardware solutions like Arduino or Raspberry Pi.

The Internet of Things concept – smart objects automatically interconnected through Internet that can interact with one another – opened a virtually unlimited world of opportunities for hardware startups.

Cisco estimates that more than 50 billion devices and objects will be connected to the Internet by 2020 and no wonder that even big names like Google, Facebook, Apple and Microsoft jumped into the game, usually by acquiring smaller players.

However, a hardware startup is more challenging than a pure software one (any current smart object includes firmware). You have to handle longer production cycles, different deployment strategies and resource planning, manufacturing localization, distribution, etc.

That’s why, at How to Web Conference 2014, we’re asking: ‘How hard is hardware?

“Hardware is unforgiving: more partners are involved, more money’s necessary, and any decisions you make are much more final than in a pure software business”, says Ze Pinto Ferreira, Co-founder & CEO FNV Labs.

When you start to scale up, those decisions become set in stone and that can be very scary. So yeah, it can be harder, but if you’re smart and hard-working you can make any venture work.”

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Ze is the founder of Mellow, a sous-vide machine destined for home use, which was independently crowd-funded through a pre-ordering campaign, without the use of any dedicated platforms.

Ze was previously R&D at Procter & Gamble, and he is very keen about hardware products so you shouldn’t miss his talk in the ‘How hard is hardware?’ panel in the Future Trends & Entrepreneurship track at How to Web Conference 2014.

Many discussions in panel will be centered on manufacturing challenges and how to tackle them. When you start a hardware company ‘time’ becomes the main focus. It can be your friend and help you beat the competition, if you manage it correctly, or it can be your worst enemy.

“Have an understanding of how close to manufacturing each prototype is, and budget for delays at every step of the road”, adds Ze.

Another hot topic for hardware startups is production localization. Should a startup try to manufacture locally or should it go to China, for example?

I’d look at China early on. There’s a lot to be said for having local manufacturing, but if you’re going to sell to multiple regions and hope to scale to large volume quickly, there’s no other country that’s so well equipped to help. Be prepared to move there for a while, though” advices the Mellow founder.

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Indeed, in the case of offshoring the manufacturing process, the production handling and quality control check as well as the relationship with the factory comes to attention. Should you have an experienced third party handle it or should you do it yourself? Come and find out at ‘How hard is hardware?’ panel discussion on the Future Trends & Entrepreneurship track at How to Web Conference 2014.

Along Ze Pinto, the panel will also feature Luka Sucic, Business Development and investment Manager & at Hub:raum accelerator which links tech entrepreneurs and high growth startup companies with the expert network, capital and business opportunities of Deutsche Telekom. Before this, he was an innovation specialist in Telekom Croatia, linking new business opportunities with corporations, and ran his own startups before that.

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Another thing to keep in mind if you have or plan on founding a hardware startup is trying to find a reasonable balance between quality and cost. “To be frank, you’re lucky if you can get either“, considers Ze Pinto Ferreira.

At Mellow we optimize for quality. We’re not interested in making the most money possible off our early users. As long as we’re sustainable, the time to maximize margin is when we have economies of scale in our favor.

Other topics of the ‘How hard is hardware?’ panel that address the specifics of this particular kind of startups will be prototyping, design and UX, branding and marketing. We also recommend the keynotes and presentations in the Product track if you seek to better understand the specifics of product management and development.

This is just a glimpse of what you will find about hardware at How to Web Conference, but there’s much more that will enable you to get the big picture this November. So get your very early bird ticket for the Future trends & entrepreneurship track starting at 59 EUR!

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