the hardware code - why hardware startups fail or succeed
TRANSCRIPT
The
Hardware Code
Program-Based Hardware Fund
Pre-seed — $100k + Program Seed/A — Follow-on
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HAX | HARDWARE TRENDS 2017 | PAGE 3
$300MASSETS UNDER MANAGEMENT
600+STARTUP
INVESTMENTS
№1 EARLY STAGE INVESTOR (2017)
THE BIG FOUR
>150 STARTUPS / YEAR
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HAX | HARDWARE TRENDS 2017 | PAGE 5
HARD TECH VERTICAL PROGRAMS
MILESTONE-BASED INVESTMENT
№1 EARLY STAGE INVESTOR (2017)
(NEXT FUND: 1Q’18)
AI, energy, & life sciences are promising fields where you can
make a huge impact.
It's what I would do if starting out today.
STARTUPS238YEARS5
RAISED$430MKICKSTARTERS111BACKERS$50M
INDUSTRIAL
CONSUMERHEALTH
ENTERPRISE
10
20
30
40
2012 2013 2014 2015 2016 2017
B2B IS GROWING
Richard Branson,
CO-INVESTORS SAMPLE
Most Startups Fail
Why Hardware Startups Fail
1. Lack of consumer demand
2. High burn rate
3. Lack of interest after initial crowdfund
4. Product strategy mistakes
• https://www.cbinsights.com/research/report/hardware-startups-failure-success/
Why Why Why Why Why
Why startups fail
Lack of demand
High burn rate
Why startups fail
Lack of demand
High burn rate
Positioning Price Cash flow
Development
Sales
Visibility
Customer discovery
Distributionterms
Factoryterms
MarketingPR
Distribution Prototyping
Manufacturing
R&D Team
Why startups fail
Lack of demand
High burn rate
Positioning Price Cash flow
Development
Sales
Visibility
Customer discovery
Distributionterms
Factoryterms
MarketingPR
Distribution Prototyping
Manufacturing
R&D Team
Why startups fail
Lack of demand
High burn rate
Positioning Price Cash flow
Development
Sales
Visibility
10x Advantage
Science SoftwareExperience
Nice to have Must have
B2BB2C
Features
Science Fiction
Why startups fail
Lack of demand
High burn rate
Positioning
Customer discovery
10x Advantage
Science SoftwareExperience
Price
Distributionterms
Factoryterms
Cash flow
Nice to have Must have
B2BB2C
Features
Science Fiction
MarketingPR
Distribution
Visibility
Prototyping
Manufacturing
Development
R&D Team
Sales
HAX Startups
Results
Trajectory
Milestones• Lab prototype
• Work/Look-like
• DFM
• Product
• $1M, $3M, $5M, $10M…
• Profitable
Learning Curves
Learning Curves• Positioning
• Prototyping
• Manufacturing
• PR & Marketing
• Sales & Retail
• Financing
• Product, Team & Self-Management
SEED 4 MONTHS
GROWTH 6 WEEKS
O TO 1 1 TO NSHENZHEN
Prototype to LaunchSAN FRANCISCO
Product to Scale
Learning Curves• Positioning (HAX SZ)
• Prototyping (HAX SZ)
• Manufacturing (HAX SZ)
• PR & Marketing (HAX SZ + HAX SF)
• Sales & Retail (HAX SF)
• Financing (Coming soon!)
• Product, Team & Self-Management
4 Groups
4 Groups
• Failed
• Ventures
• Bootstrapped
• Recoveries
Failed
Failed
• Too niche (early programs)
• Founders split (1 in 20)
• Gave up early (< 2y)
• Too slow
Ventures
MAKEBLOCK
FLOW NEUROSCIENCE—DEPRESSION TREATMENT
POINT—FRIENDLY HOME SECURITY
AVIDBOTS—COMMERCIAL CLEANING
Canada
NURA—HEADPHONES TUNED TO YOU
low tones mid tones high tones
sens
itivi
ty
France
OCTOPUS
1 2 3 4
18 MONTHS FROM CONCEPT TO MARKET
R&D1
2
5
4
3PrototypingProductionInvestment
World-Class STARTUPS World-Class RESOURCES
Sales
R&D1
2
5
4
3PrototypingProductionInvestment
World-Class STARTUPS World-Class RESOURCES
Sales
Bootstrap
TRAINERBOT
VOLTERA
PINPRESS
ORENDA—HOME BARISTA
WAZER—WATERJET CUTTER
IN 3 MONTHS…
from “Does it work?” to… “How much?”
Recoveries
Pre-HAX
PARTICLE—IOT CONNECTIVITY & CLOUD SOLUTION
U.S.A.
SIMBE ROBOTICS—SUPERMARKET INVENTORY
Crowdfunding
BARTESIAN—COCKTAIL MACHINE
PETRONICS—SMART CAT TOY
Product 2
NTC—HACKABLE CAMERA
CHIP—$9 COMPUTER
VUE—SMART ACCESSORIES
Health
LIEF THERAPEUTICS—ANTI-STRESS PATCH
Customer Pivot
OPENTRONS—LAB ROBOT
Conclusion
Best practices• It’s all SKILLS
• It does ONE job
• It targets a NEED
• Your factory is your PARTNER, you BANK, your INVESTOR
• It’s a NEW DISH
• It’s a STORY
• It must SELL
• It takes YEARS