7 common pitfalls for hardware startups and how to avoid them
Hardware Startups

7 common pitfalls for hardware startups and how to avoid them

You’ve likely heard that “hardware is hard”; mostly because hardware startups have to deal with things that software companies don’t really have to worry about. That includes pesky details such as “physics” and “battery management” and “general wear and tear.”

Hardware development is complex and challenging. Physical parts have tolerances, both in size and material properties, and components get hot and their characteristics change when they do. Once you’ve designed a product, the manufacturing process itself poses significant challenges. Ensuring that components are produced with the required precision and quality demands careful planning and rigorous testing throughout the process. Hardware manufacturers often work with multiple suppliers and manage supply chain logistics, which can be resource intensive and time-consuming.

Hardware development is inherently a lot more costly than cranking out software. Developing a physical product requires substantial investment in materials, tooling, manufacturing and logistics. These expenses, combined with the need for multiple iterations of prototypes, can make the process financially risky, particularly for resource-constrained startups.

There are plenty of pitfalls, and as a hardware nerd myself (I founded a hardware startup, which I then spectacularly ran into the ground at high velocity, making mistakes that most experienced hardware folks would laugh at these days), I am always curious to learn how hardware entrepreneurs can avoid some of the common mistakes.

Sera Evcimen knows a thing or two about the challenges for hardware startups. She’s a mechanical engineer and worked at four startups, including satellite design, consumer electronics, standing up the R&D department for a fusion startup and working on ion thrusters. These days, she’s an adviser for a large company she can’t name, where she’s working on soft robotics for human interaction, and she’s an all-star mentor for the Techstars startup accelerator. She even runs her own consultancy to boot. She’s working on a podcast called The Builder Circle, where she breaks down the challenges and risks of building hardware companies. Like I said, she knows her stuff, and we chatted about things to avoid when building hardware.

Lack of focus

As a startup, you are an organization designed for learning, and learning is sensationally exciting. But it has its downsides: As you continue to learn, it’s tempting to try to chase every great opportunity that comes along.

The mistake is to fall for the temptation and lose focus.

“Oftentimes, this sneaks up on people because people have completely different systems that they’re trying to push forward,” Evcimen told me. “They’re saying, ‘Oh, this could work in this application, and this application and this application.’ Alternatively, a company may say, ‘Oh, it’s just the same thing, but bigger,’ or ‘It’s just the same thing, but smaller.’ I think it’s really important to know that each variation of a product is just an additional product line. Similarity doesn’t mean anything. Even if that is true, you still have to have individual designs; you still need to manage your supply chain. And … you even need to develop multiple supply chains.”

A smaller module might mean different chips. A different casing could mean different molds and tooling. Each small change can affect the whole product development timeline. Even something as simple as launching exactly the same product in a different color can create significant bottlenecks.

“Working on more than one version takes away from early learning because you’re trying to do too much at once. You’re already a small team, trying to operate with cost constraints and time constraints,” she said. “It also dilutes the understanding of the market: If you do your proper due diligence and your user studies and market research, you’ll start to get a sense of which one is going to be potentially the most lucrative, or which variant you can use to learn quicker. By giving up focus, you are going to start learning slowly on all of them. That means you need to bet on one, rather than pursuing one that has the most potential.”

And that can be a killer: Startups raise money, then make a bunch of products, trying to push them all forward at once. If something happens in the production process, they’re stuck with a bunch of half-baked products, sucking up funding along the way. It’s a spiral, and it’s not pointed in the right direction.