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Renee DiResta - The Hardware Startup: Building Your Product, Business, and Brand

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Renee DiResta The Hardware Startup: Building Your Product, Business, and Brand

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Thanks to the decreasing cost of prototyping, its more feasible for professional makers and first-time entrepreneurs to launch a hardware startup. But exactly how do you go about it? This book provides the roadmap and best practices you need for turning a product idea into a full-fledged business.

Written by three experts from the field, The Hardware Startup takes you from idea validation to launch, complete with practical strategies for funding, market research, branding, prototyping, manufacturing, and distribution. Two dozen case studies of real-world startups illustrate possible successes and failures at every stage of the process.

  • Validate your idea by learning the needs of potential users
  • Develop branding, marketing, and sales strategies early on
  • Form relationships with the right investment partners
  • Prototype early and often to ensure youre on the right path
  • Understand processes and pitfalls of manufacturing at scale
  • Jumpstart your business with the help of an accelerator
  • Learn strategies for pricing, marketing, and distribution
  • Be aware of the legal issues your new company may face

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The Hardware Startup

by Renee DiResta , Brady Forrest , and Ryan Vinyard

Copyright 2015 Renee DiResta, Brady Forrest, and Ryan Vinyard. All rights reserved.

Printed in the United States of America.

Published by OReilly Media, Inc. , 1005 Gravenstein Highway North, Sebastopol, CA 95472.

OReilly books may be purchased for educational, business, or sales promotional use. Online editions are also available for most titles (http://safaribooksonline.com). For more information, contact our corporate/institutional sales department: 800-998-9938 or corporate@oreilly.com .

  • Editors: Brian Sawyer and Mike Loukides
  • Production Editor: Matthew Hacker
  • Copyeditor: Molly Ives Brower
  • Proofreader: Eileen Cohen
  • Indexer: WordCo Indexing Services, Inc.
  • Interior Designer: David Futato
  • Cover Designer: Edie Freedman
  • Illustrator: Renee DiResta, Brady Forrest, and Ryan Vinyard
  • June 2015: First Edition
Revision History for the First Edition
  • 2015-05-18: First Release

See http://oreilly.com/catalog/errata.csp?isbn=9781449371036 for release details.

The OReilly logo is a registered trademark of OReilly Media, Inc. The Hardware Startup, the cover image, and related trade dress are trademarks of OReilly Media, Inc.

While the publisher and the authors have used good faith efforts to ensure that the information and instructions contained in this work are accurate, the publisher and the authors disclaim all responsibility for errors or omissions, including without limitation responsibility for damages resulting from the use of or reliance on this work. Use of the information and instructions contained in this work is at your own risk. If any code samples or other technology this work contains or describes is subject to open source licenses or the intellectual property rights of others, it is your responsibility to ensure that your use thereof complies with such licenses and/or rights.

978-1-449-37103-6

[LSI]

Preface

This is a book about how to build a hardware business.

The goal of this book is to provide a roadmap for makers and hardware entrepreneurs who are looking to turn their product ideas into full-fledged businesses. Building a software startup has been largely templatized over the last five years. Free tools enable entrepreneurs to rapidly build, collaborate, deploy, and pivot. There is an extensive network of mentors and thought-leader bloggers sharing advice rooted in their own experience. There are bestselling books devoted to best practices, such as Do More Faster, The Lean Startup, and From Concept to Consumer. There are innumerable incubators and investors rounding out the ecosystem. It is now comparatively easy and inexpensive to launch a software startup.

Hardware is just starting to develop this type of ecosystem. Makers have been around for decades, but hardware startups have only recently begun to enjoy the type of attention and funding common among their software counterparts. Significant changes have taken place in the last two years. The decreasing cost of prototyping is lowering the barriers to entry and making it more feasible to develop a physical product within economic constraints. Kickstarter and Indiegogo have created platforms that enable fundraising for small-batch manufacturing and facilitate a community of early adopters. The number of hardware startups is on the rise. Venture capitalists who were previously uninterested in non-software investment are sitting up and taking notice. But the iconic how-to guidethe Do More Faster or Lean Startup of hardwarehasnt been written yet. Our goal is to be that guide.

Who This Book Is For

This book is meant for hobbyists and makers who are considering turning their idea or side project into something more.

Its for maker pros who have built a successful product and are interested in turning it into a company.

Its for the curious: software engineers considering switching from bits to atoms, or investors who want to learn more about this new ecosystem .

Basically, its for anyone interested in understanding the challenges unique to founding and launching a hardware startupand overcoming them.

How to Use This Book

The book is organized into the following chapters:

The first chapter introduces the state of the market for hardware startups, dividing it into four main product categories: connected devices, wearables and personal sensors, robotics, and designed products. It briefly examines the forces that have led to the recent growth of the ecosystem, including the history of the maker movement.

This chapter begins by emphasizing the importance of validating the idea for your company through conversations with distinct groups of people who will be critical to your success as a company. It then introduces the topics of community building and customer development, discussing the different relationships that founders will form to help them along the path to building a company. These include the relationship between cofounders, how to choose advisors, and how to reach potential early adopters.

This chapter covers techniques for market, consumer, and competitive-landscape research. It aims to help founders better understand where their products fit into a market ecosystem, which is important for idea validation, early brand positioning, and future fundraising. It also works through the basics of customer-development interviews with an eye toward lean product development .

This introduction to brand development for hardware startups covers the basics of brand marketingincluding brand identity, mission, and personalityand the development of brand assets. It will help founders craft their companys cohesive brand identity, which is a critical component of success for any physical product.

This chapter is a guide for getting from design to physical thing. Topics include types of prototypes (including works-like and looks-like prototyping), building your engineering and design team, outsourcing versus insourcing, chip selection, software, and some common terminology specific to the hardware space.

This chapter discusses the common processes and pitfalls startups face when moving to manufacturing. It covers when and how to choose a factory and supply chain, where to manufacture, testing and certification, and packaging.

This chapter presents a survey of the hardware-startup incubator and accelerator ecosystem. It covers the top programs supporting entrepreneurs today, with an eye toward differentiating their offerings and helping interested founders select the program thats right for them.

Crowdfunding platforms have made a dramatic impact on the ability of hardware-startup founders to take an idea to market. This chapter covers best practices for running a crowdfunding campaign from start to finish: choosing perks, developing a pricing strategy, driving traffic, building community, and more.

This chapter helps founders navigate the fundraising ecosystem. It examines the players who control capitalincluding angels, venture capitalists, and strategic investorsand the pros and cons of taking funding from each. It provides guidance on the strategies most likely to result in a successful fundraise, including when and how to reach out, how to create an ideal pitch deck, and how to structure a round.

This chapter begins with a survey of business models and pricing strategies. It introduces logistics and fulfillment best practices and evaluates distribution channels, with special attention paid to margin and marketing considerations. It also covers the metrics that matter when evaluating the growth of a business. The emphasis throughout is on helping founders make the transition from

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