Starting a hardware business is a lot more challenging than setting up a software venture. It requires more investment in terms of time, money, and labor and will leave you with plenty of physical inventory if no one likes your product. It can even get you knee-deep in debt if you borrowed money to set up your business and spent hundreds or even thousands of dollars on manufacturing.
So, if you want to get into the hardware industry, you need to take the right steps to minimize your risk and increase your chances of success. We’ve listed a handful of tips that will help you reach these goals:
1. Know Your Target Audience
In a previous blog post, we talked about the importance of designing a product for consumers, which requires you to know whom you’re designing for. Unsurprisingly, this advice also applies to the process of setting up a hardware business: you need to know the type of people who will most likely buy and use your products and be loyal to your brand. By having this demographic information, you can tailor your design in such a way that it addresses your target market’s needs and wants.
Having a clear idea of your target demographic also helps you identify the marketing platforms you should focus on and the kind of campaigns that will appeal to your customers. You can then use this information to come up with excellent marketing and advertising strategies that will give you optimum ROI.
2. Work With Several Designers and Engineers
Hardware startup owners often make one of two huge mistakes: working with just one engineer, or designing their product on their own without getting input from others.
Let’s tackle the first mistake. Hiring just one engineer limits you to the ideas that he can produce, which can severely cripple your product in terms of features and functionality. It also prevents you from spotting faults and possible issues in the design. Remember: engineers are human, too, and they’re bound to make mistakes somewhere along the way.
It can also be problematic if you decide to creating a design on your own without getting it checked by others. Even when you think your design is perfect, there might still be a few flaws that you have overlooked and that you won’t notice until somebody points them out to you. You’ll also lose the opportunity to get tips on how to improve your product and make it even more marketable.
Fortunately, finding multiple designers and engineers to assist you is easy when you choose Cad Crowd. We have a global network of experts who are skillful in various engineering and manufacturing niches and have worked with many hardware startup owners. Simply tell us what your project details are, and we’ll connect you with designers and engineers who can help you build the best possible product.
3. Prototype as Soon as You Can
There’s never a good reason to delay prototyping; in fact, it’s important to get it underway as soon as you’re comfortable with your design. By making a prototype of your product, you’ll find out if it functions as designed or if it needs more work. It’s very difficult to fully analyze your design until you’ve got a prototype in hand. You’ll also be able to spot flaws and potential problems that you might not have seen on paper.
Having a prototype of your product also makes it easier for you to attract investors and partners (if you’re going down that vein) or simply get the support of your bank. You can even use your prototype to create marketing materials and pique the interest of your target audience.
We can also help you with this. Take advantage of our contract manufacturing services, and we can connect you with some of the best rapid prototyping companies that work with a wide range of metals and plastics. The only thing you should do is to choose a company that has experience with prototyping products similar to yours and can give you the best results.
4. Decide Between Local and Offshore Manufacturing
Once you’ve tested your prototype/s and are satisfied with how they work, it’s time to go into full-scale manufacturing. At this stage, you might think of looking for an offshore manufacturer — perhaps located in China, where parts and labor expenses are low — so you could have the lowest possible production costs.
It’s not a bad idea considering that bigwigs like Apple are doing the exact same thing to manufacture their products. The problem is that opting for offshore manufacturing in the first few stages of your business can be detrimental. For one thing, you won’t really have full control over how your product is made, unless you personally visit the area and monitor the manufacturing process. Otherwise, you can only give instructions and hope they’ll be followed to the last letter.
More serioiusly, offshore manufacturers often accept only large-volume projects. Many of these operations simply won’t be interested unless youre looking to produce many thousands of units. This is great if your products would sell like hotcakes but, if they won’t, it’s a huge upfront investment — and you’ll have to deal with a large inventory that nobody wants to buy.
In some cases, the best solution is to manufacture locally — at least until you’re sure that your product clicks and your target market loves it. Choosing a local manufacturer does make your per-unit price increase a bit, but the payoff is that you’ll lower your risk (since you can produce in small batches) and even reduce your overall costs. The best part: you’ll get to monitor how your products are made and ensure they maintain excellent quality. We can help you connect with U.S manufacturers.
5. Get the word out ASAP
A lot of hardware startup owners think they only need to market their products once these are packaged and ready to ship. Unfortunately, by the time you reach this point, it’s already too late — you have a large inventory of new devices, but no one even knows that they exist. You need to build up your market interest long before launch, or you will run out of money before you make any real sales.
So what should you, then? Well, the best strategy is to advertise your products ASAP. You don’t necessarily need to have the most complex leaflets or TV commercials; simply getting out the feelers is enough, especially in the early stages. Contact tech bloggers and see what they think of your prototype. Create a page on crowdfunding site not just to raise funds but to let people know about your product. Thet key, no matter what your outreach strategy, is to start early, and always be considerate of the 50/50 rule.
This creates awareness about your new device and makes your target audience interested in what you’re working on. This, in turn, means that they’ll be lining up (and perhaps even fighting over themselves!) to buy your product once you’re ready to release it. It even helps you get the opinions and suggestions of your target demographics, which you can use to further improve your design.
6. Position Yourself as an Expert
This is one of the best ways to get people to buy your product. Think about it: would you buy cake and other desserts from someone who doesn’t know how to bake? Would you get a wound treated by someone who’s not a doctor? Your answer is probably “No”.
This is exactly how most consumers feel. They want to buy things (particularly electronics and big-ticket items) from businesses whom they think can be trusted since it gives them the assurance that they’ll get value for money.
Not sure how to establish yourself as an industry expert? You can start by creating a blog and posting industry news as well as how-to guides that your customers will find helpful. You can also contribute to other blogs, online magazines, and news sites and make podcasts and/or vlogs that tackle relevant topics in your niche. If you have the time and creative energy, you can even try your hand at writing an industry-specific book! It doesn’t have to be a New York Times’s bestseller, but it does have to prove to everyone that you’re an expert at what you do.
7. Make Marketing Your Friend
Marketing should start early, and it should never stop. As long as your business exists, you’ll need to continue to market your products and reach out to your target audience. This helps you maintain customer interest and ensure that your business and products will stay relevant in the eyes of your target demographics.
One of the best ways to do this is to be active in social media. Whether you love it or hate it, you can’t deny that it allows you to reach a large number of potential customer without having to spend a fortune. Just remember: succeeding on social media isn’t easy. It’s not just about posting an interesting status update or an eye-catching photo with a witty caption; it’s also about knowing which platform your target audience uses. Teenagers, for example, are most likely on Snapchat and Instagram, while career professionals and entrepreneurs are usually on LinkedIn. Market research is key.
8. Build a Community of Believers
A lot of people make fun of Apple fanatics, but you can’t deny that they have greatly helped the company. They’re usually the first in line when a new iPhone or iPad comes out, and they’re not afraid to share their opinions online and offline. They’re basically the Apple’s brand ambassadors — a job they’ve taken on for free. It’s become part of their identity.
You probably won’t be able to replicate this phenomenon in your target audience (heck, you might not want to), but you can at least instill brand loyalty in your customers and make them believe in what your business can do. Having loyal customers help you maintain sales and spread the message about your products to those who haven’t yet heard of them.
Getting a hardware startup off the ground is definitely not easy. But, when you take the right steps, you can successfully create a lucrative product and a profitable business. Prototype early on, develop a marketing strategy early, and identify your target market.
Cad Crowd is here to help. We specialize in helping entrepreneurs, inventors, and innovators connect with the product design and engineering expertise they need to realize their vision. Let us know about your project.