10 Common Mistakes of Hardware Startups and How to Avoid Them

Idea

"Valuation of our company is $X"

With the advent of the internet, obtaining necessary information has become much easier, but applying new knowledge can still be challenging. Don't aim to immediately learn all startup terminology — at the initial stage, it's not necessary, as most terms are associated with later stages of a company's development. Knowing investment jargon won't help you build a successful business; these words aren't connected to your experience and only distract you from solving important problems.

Instead of reading self-help books on business, work on your idea: conduct research, study similar devices, and think about what you need to start working on a prototype. This is much more important than startup books because a successful company starts with a well-thought-out product.

"I've figured it all out: I'll sell my company to Facebook in two years."

When launching a startup, don't try to plan out all subsequent steps, including going public or selling the company. Unfortunately, your plans are likely to not materialize, so it's better for you to focus your efforts on solving other, more pressing tasks. No successful tech company has ever started with the founders' desire to quickly exit the business and collect dividends. Lacking a clear idea while having a detailed development strategy is a sure sign that you've prioritized incorrectly.

Prototype

"I just received the first working prototype from the factory, and next month I'm launching mass sales."

If the prototype works well, it doesn't mean you can start selling it right away. To make your device popular, it needs further refinement. You won't be able to test all aspects of the prototype at once, and even if the functionality is fine, you'll still need to create packaging, organize logistics, and so on. That's why after the first prototype, don't rush into large-scale production and start with batches of around 500 devices.

"I came up with the product idea and will be able to build the company on my own."

Even if you think you can handle it alone or hire employees to help you bring the product to market, try to find a co-founder. It's hard to build outstanding companies alone — you'll see how much easier it is to work, distribute responsibilities, and come up with new ideas when you have a partner. They will help you refine the product and take on tasks that you find challenging.

Design

"I ordered the design — it turned out beautifully, all white and minimalist."

or

"I made a 3D model of the future product, everyone likes it, I'll be thinking about how to release this device."

A common mistake when creating hardware products is starting with a design that's not related to the context and functions of the device, as well as the founder's vision. "Beautiful" is a poor and unfortunately meaningless characteristic. The designer should understand the mission of your company, know which versions of the product you plan to release, and what references you have chosen.

An expert can listen to you and make it "beautiful," but their work won't be relevant to reality, and the device may not be manufacturable. It's essential to consider not only the external appearance of the prototype but also the technologies, manufacturing capabilities, characteristics of the materials used, and the product's cost price.

Business

"I don't know how to do business, but I understand design — I think I'll succeed"

or

"I don't understand anything about design and electronics, but I know how to build a business — I think I'll succeed"

Neither of these statements is true. If you don't understand the startup world, don't rush to find a business co-founder just to make the company work. Business is constantly evolving, and at some point, there will be people who will help with sales and set up processes in the company so that it generates revenue.

The other extreme is to assume that if you have experience in business, you can act according to existing templates and easily build a hardware company. This is not the case because the most important thing is the right product, and creating it requires more than an MBA or corporate work experience.

Culture

"I'm launching a product — we need to create a page on the website with a photo of the entire team and the story of how the idea of our device came about."

Often, people, regardless of the company's profile and the type of products they make, strive to turn the founder into a celebrity, into someone who can be an inspiring example for others. But not all companies need to have charismatic leaders like Steve Jobs. Some organizations operate successfully without this: for example, Fitbit doesn't talk about its founder but simply produces quality trackers. In other fields, a strong leader isn't always necessary either — for example, in medicine.

The technological companies that everyone looks up to today first created a successful product or popular service and only then started talking about the people behind it. Forget about vanity and consider the surrounding context: in some cases (for example, if you work in the fashion industry), you may need personal charisma, but in others, too much emphasis on the company's founder may seem egocentric and unjustified.

"I'm too young to start my own company, I need to gain experience and work in someone else's business."

No matter how old you are, now is the best time to start your own business because building a business and creating a product from scratch is the most valuable school. If your goal is to create a quality device rather than making quick money, then you will learn much more than in a salaried position.

"I came up with an idea for a device, but I'm not an engineer, so I won't be able to start a hardware company."

If you want to be an engineer, you need to study. But if you're launching a hardware startup, it's enough to have a well-built team. At the initial stage, its success depends on a well-thought-out distribution of responsibilities and healthy relationships between people. If you need an engineer for the project, figure out how to attract them and provide suitable motivation. Relationships with employees are no different from relationships with friends, partners, or children.

"I want to start my own company, but I realize it takes a lot of time, and I won't have energy left for friends and family."

At any age, and especially when you're young, the best advice for achieving success is not to separate work and life but to try to merge them. This doesn't mean your family should work with you or that you should forget about free time. If you don't see work as a burden and your employees as subordinates or bosses but treat them like everyone else you know, it will likely be easier for you. You can achieve even the most challenging goals if your work is part of your life rather than just an annoying necessity and a way to make money.

When you start your first company, mistakes are inevitable. Don't be afraid to make them — everyone who tries to create something new makes them. We can't list all the possible problems you may encounter, but we believe that those who use common sense and have a desire to change the world will succeed.