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If you are not Apple, chances you will succeed as a hardware company are near 0

If you are not Apple, chances you will succeed as a hardware company are near 0.

Any successful hardware startups out there mind sharing their story?

Phil from 4 day week made a hypothesis that it is extremely difficult to get off the ground if you trying to sell hardware. If there are hardware startup executives here, what is your experience in marketing/selling/etc, and finally what got you to your first 100 customers? How do you deal with electronic components shortage? Is your business model B2B/B2C?

By hardware I mean there is a 'real' PCB inside the product you are selling.

  1. 15

    Lol, chances of succeeding in dropshipping 2nd - this is so inaccurate. I can tell you this first-hand.

    To dropship now is more challenging than ever.

    I will explain in more detail if needed.

    I'm also very curious about where did he get this data from.

    1. 1

      Can confirm, did it for 5 years, reason why I'm moving to SaaS lol

      Also, dropshipping is NOT a business model, it's a LOGISTIC model. The business model is eCommerce

    2. 1

      I agree completely! Dropshiping earlier was still somewhat profitable, but today ? no way !

    3. 1

      I would imagine it was just a guess based on the idea that "there are so many dropshippers out there."

      1. 1

        And that's true also, but it's all because of get-rich-quick YT gurus. And these are one of the few that got rich from dropshipping, but by selling their courses.

    4. 3

      This comment was deleted a year ago.

  2. 7

    Hardware isn't a business model. 🤷
    Hardware can be sold on a subscription basis. This is a very common practice where the hardware provides deliberate savings for the customer but there is a lack of trust in the product value proposition ($savings) or the end customer doesn't want to bear the cost upfront.

    A perfect example of a successful hardware heavy business is solar as service provider Enpal (>$1B valuation) in Germany. They provide a one stop shop hassle free solution for residential homeowners to get solar without bearing the upfront cost. Their value proposition is almost a no brainer for a good portion of homeowner because the leasing cost ends up being less than what you would be paying to the grid for the same amount of electricity consumed (it's not always true but it gets quite close). Additionally, end customers only bear minimal operational risk - in case the systems goes down, Enpal repairs it.

    The same applies to unicorn Efishery's core business in Indonesia, which helps fish farmers to save on input food cost by deploying iot devices on the farms through a win win financing scheme. Farmer save more by optimizing food input cost than what the iot technology actually costs.

    1. 1

      "Hardware isn't a business model" is an astute observation.

      I would also suggest that in addition to selling direct and selling on a subscription basis it can be used to capture value through a metered or transaction basis.

      Some examples: copiers where you pay by the copy, Nitrogen and Oxygen generators where you pay for gas generated (actually extracted from local atmosphere), and robots you pay per task.

    2. 1

      Wow! This is really detailed and well put ! thank you for sharing

    3. 1

      I'm impressed by how well you put that first paragraph into words.

  3. 2

    I would argue if you have a legitimate product idea, there is far less competition when it comes to hardware businesses. That being said, it's definitely something with higher barrier to entry due to higher upstart costs compared to software.

  4. 2

    There are many many baby boomer hardware manufacturing businesses in the US that are quietly generating great profits but their owners don't use Twitter so you don't hear about them. As we re-shore more and more in the future these companies' margins will grow. Lots of opportunities to buy these businesses as their owners retire and optimize for the internet.

  5. 2

    I would love to see where did he got the data from.

    I see successful new SaaS companies here on IndieHackers all the time.

    I see very successful new hardware companies on Kickstarter and Indiegogo all the time.

    1. 1

      yes, but you don't here about freelancers who make money, they don't have stories to tell, they just earn. I think this is an apples and oranges comparison, this is like saying it's easier to get a job than start a company.

    2. 1

      I find it plausible that it is around 7 times harder to succeed with freelancing than SaaS. Even if you read 3 successful SaaS startup stories per week here, it's only around 150 per year. Not really that many.

      1. 2

        Again, is this an opinion or a fact?

        I would love to see the source of the information presented in this thread.

  6. 1

    https://flipperzero.one/ is an example of a relatively successful hardware startup with a unique value proposition and great attention to product quality, but, again, it's an outlier.

    They blogged about their progress and all issues since inception - very good read for those who're planning to start HW business. I tried multiple times (personal customizable time tracking device and fido token), but gave up.

  7. 1

    Astranis, Cobalt Robotics, Zipline if we trust this list https://topstartups.io/?industries=Hardware if you're curious what the secret sauce is, take a listen! https://bit.ly/3v4iBzM + https://bit.ly/3v4nkll + bit.ly/3Gq7vff

  8. 1

    MakeSafe Tool https://makesafetools.com/ has been growing successfully as a bootstrapping hardware startup since 2016, with 2022 their best year to date. It's a hardware product with a "real PCB" inside and standard components. They primarily sell B2B, some direct, some through distributors, and some B2C for hobbyists who want a fast kill switch for a power tool that does not damage the tool.

    Their about page https://makesafetools.com/about/ lists a rough component breakdown: American manufacturing is a critical part of the economy and we work hard to support other local manufacturers. All of our products are designed and manufactured in the USA. Most of our components also come from US manufacturers. For the few tiny parts that aren’t available domestically, we make sure to source them from domestic distributors. Here’s a breakdown of a few of our major component manufacturers and distributors.

    The founder, Scott Swaaley, is an electrical engineer who designed and prototyped the product family. He has a long interest in worker safety and developed the idea for a "machine brake" that would not damage the tool. I met him at a Bootstrappers Breakfast in December 2017 and profiled him in July of 2018: https://www.skmurphy.com/blog/2018/07/23/scott-swaaley-launches-makesafe-tools-to-improve-workplace-safety/

    He offers an existence proof that it's possible to bring new hardware to market . I have met a number of other electrical and mechanical engineers successfully bootstrapping hardware startups at the Bootstrappers Breakfasts. It's a difficult path but doable.

  9. 1

    haven't started anything yet, but definitely gonna start a hardware company soon. Let's see. Hope for the best.

  10. 1

    I think if your creation is significantly advanced in science and engineering, you have a chance. I.e. you can't just create a "cool" hardware that sells on hype. But if it's faster and more energy efficient than current generation chips, you have a chance.

  11. 1

    Neccessarily easy thing is not what people want. I mean it's easy to be an engineer and earn a satisfactory living, but there's many people who don't want that.

    Freelancing for example, you just make what other people want you to make, you don't get to do what you want.

  12. 1

    I mean depends right? And it's also depends on the bets you are taking.

    Technically, I can have hardware company if I wanted to but I just don't. It's a tedious work. It's a stable return but it's really hard work. Also, it's location dependent...

    Hardware's scale is by size at a given time and not for the durations like how SaaS would plan their financial model.

    My hardware background is pc, embedded devices, smartphones (across consumer, industrial, healthcare, military). They are very different.

  13. 1

    It's actually a great time to make hardware. It might take more capitol to create a hardware company, i.e build prototypes, but it's quite inexpensive at scale. Think about Fitbit. It's pretty cheap to produce when you've got thousands of orders coming in.

  14. 1

    I think https://kytch.com/landing is a good study case for a successful hardware startup. They're trying to solve the issue of Broken ice cream machines at McDonalds. I believe their hardware is a RaspberryPi plus some of their own circuits and software to help display actual helpful messages on Taylor ice cream machines.

  15. 1

    Being a hardware startup in the US or Europe is nearly impossible since we have outsourced most manufacturing. We don't have the skills or factories to compete with Shenzhen, the silicon valley of hardware. This strategy is for maximising cooperate profits, not much else.

    1. 1

      It's not all about just manufacturing components right? Of course when looking at the mass manufacturing of hardware, places like ShenZhen and the Greater Bay Area are becoming really hard to compete with. However, many companies just assemble an assortment of components to create complex systems.

      1. 1

        I attended a talk on small scale manufacturing a number of years ago, expecting that it would be about setting up your own manufacturing line. It was actually a talk about "don't do that, here's how to work with contract manufacturers instead." It's pretty common to develop a hardware product, and contract out the actual manufacturing.

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  18. 0

    Hardware is hard... but it might be where the biggest opportunities are.

    Check out this post: The next big breakthrough in AI will come from hardware, not software about

  19. 2

    This comment was deleted a year ago.

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