‘Welcome Back’ – The Hardware Start-Up

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The hardware product renaissance is back and in a troubled market, both established companies and entrepreneurs are welcoming it with open arms.  The decade long gold rush to develop web software Apps is maturing.  Increasingly innovators are combining physical products with new Apps in their product roadmaps.  A suite of software platforms, wireless hardware modules, flexible manufacturing processes and low cost single item shipping are making the design, development and delivery of these products easier for even small enterprises and virtual companies.  

“It's a shift that Silicon Valley has taken note of in the last couple of years. Hardware startups are increasingly sharing the spotlight with software companies.” Alex Chang – Wired

It is good to see the pendulum swinging back towards an array of Gizmos, Gadgets and physical products that when combined with Apps provide new ideas for smart devices that deliver great value to the user and utilize the global digital network that connects us all.

“The Hardware Renaissance” is unmissable. Paul Graham has noticed it and, certainly, my credit card has. Where once, entrepreneurs turned to software to form their ‘next big thing’, there is an increasing trend towards hardware in this space." – Richard Oakley VentureBurn

There are many hardware opportunities and rich intellectual property opportunities for product ideas in a wirelessly connected world.  The last hardware revolution was the in 80’s and 90’s with infrastructure deployment of the landline and wireless telecom and data networks.  Once the network infrastructure and platform software was in place, the add-on product over the last decade has been mostly software Apps.  These Apps were modular, simpler for small enterprises to build and the technically sophisticated portable hardware (tablets and smartphones) were already available.  As the software only opportunities mature the new value is found in combining Apps with hardware, looking at niche markets that leverage the network infrastructure and access to data in the Cloud.  Product teams are designing to provide real-time access for people to enhance their relationships, provide media, information and awareness of important things, in a personalized way.

Hardware development is much riskier than software development.  It can take significant capital and the amount depends on how much software and hardware development the new product is going to require.  With existing platforms and modular components it is getting much easier to develop a hardware product.  But the process does not go away - you still need to build prototype after prototype before you can go into production.  The wrong choice of features or failed prototype success can mean tens to hundreds of thousands of dollars lost. And, it’s easy to take a wrong turn.  As the hardware is being completed, you have electronics and software development to do.  Hardware development also requires selecting manufacturers, designing the packaging, organizing logistics, testing the product and passing regulatory compliance, oh and then, there’s financing and managing build inventories.

Three key enablers have come into the market in the last few years, (1) Rapid Design: Prototype - Build Techniques including Crowd Sourcing of simpler products, (2) Crowd Funding:  Online Kickstarter sites where individuals help fund a project for the thrill of being involved and the possible reward of being first to have the new product and, (3) An increase in the number of people wanting to invent and I see two reasons for this behavior.  The first is a troubled economy where companies are being forced to take higher risk and innovate with new products.  The second reason is an increasing knowledge of the business aspects of inventing through the Dragons Den. The show is now being watched by 1 in 10 Canadians according to recent stats.

Design 1st is Ottawa’s largest independent physical product design and engineering team, we invent and develop products with R&D departments and Start Ups across North America.  Over the past 3 years we have witnessed firsthand the hardware product renaissance.  Clients are asking for help to put wireless devices on athletes – real-time video in moving vehicles – patient’s health and safety  monitoring – smart devices for home management – heart and breath belts for nutrition and fitness tracking – Security Cameras control by smartphones – real-time poker game dealer monitoring – hydro, heat, LED lighting and fluid monitoring for commercial spaces providing immediate adjustment and alerting and many more standalone products in very different markets and all needing simple, easy to use and more functional product.

Development time frames to invent, test and engineer are being reduced from over a year to less than six months.  The process has evolved with smaller teams of experts; faster project times, lower R&D costs; more rapid testing to verify markets with prototypes and an ability to commit to lower production volumes. The coming innovation wave is a wealth of appealing high quality product delivered by a far greater number of people that used to only be the territory of larger firms.

Kevin Bailey

Design 1st Ottawa

Expert Bloggers is a marketing feature of Ottawa Business Journal. To participate, please email sales@obj.ca

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