Running a hardware venture: 5 things you didn’t know about hardware startups
We gathered several useful insights from the report the Hardware Club conducted. Enjoy!
1. You need around three months to find a contract manufacturer
According to the report, finding a contract manufacturer (CM) will take you about three months. Nevertheless, it’s not as significant production difficulty as ensuring the product quality at every step of the manufacturing process. The second crucial one is growing to Design for Manufacturing (DFM), then fundraising and further scaling. Although finding the proper CM takes rather much time, it is not the most difficult as many young startups suppose.
2. Companies are on average late to ship by 3+ months
Almost all hardware companies, even giants like Google or Apple, tend to ship late. Statistics show that startups late to ship by 15.6 weeks on average. What about the reasons for the delay? There are three of the most notable. They are delay due to the company (8.8 weeks), the second is due to the suppliers (7.6 weeks), and the third is due to the manufacturer (8 weeks).
3. Filling a hardware engineer position is the most challenging
No doubt, the hiring process affects the final product and its quality. This process is rather tricky, as hiring the right candidate with decent experience and suitable skills are the most challenging, especially when it comes to finding a hardware engineer (23% say it is the hardest position to fill across all departments, followed by software engineer 19% and sales specialist 15%).
4. The majority of hardware startups (86%) do protect their technology through patents
The extent to which a company's hardware & software is defensible illustrates how the network affects its ecosystem or just a deeply integrated product experience. Only 14% of the surveyed have not protected their innovation yet or not planning to do so soon.
5. The acquisition is the most preferable and realistic goal for a hardware startup
And finally, there remains a fact concerning the overall hardware startups' attitude to private and public markets. What do owners feel about the M&A market for hardware startups? Whether in Europe or North America, 54% of the respondents predict more acquisitions to come in the hardware space.
Related articles: Hardware startups: a journey from prototype to mass production