Hardware trends 2015

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Hardware trends 2015

  1. 1. HARDWARE TRENDS 2015 v1.2 March 6, 2015 www.haxlr8r.com www.slideshare.com/haxlr8r
  2. 2. • HAX (aka HAXLR8R) invests in hardware startups and makes sure they build the right thing, build it right, and get to market fast. • We see well over a thousand hardware startups per year across categories ranging from robotics, sensors, health tech, smart home and lesser known ones such as sports tech, pet tech, bio-sensors and more. • As a result, it gives us a sense of the “near future” - products that might launch in a year, later or will never get sold. We try to play our part in bringing the most promising ones to market. • This report has been created to give an overview of the “State of Hardware”: innovative products but also aspects of prototyping and manufacturing that often go unreported on the arduous journey to success or oblivion. • Comments are welcome on how to improve this report at makeit@haxlr8r.com or via twitter at @haxlr8r. • Applications to the accelerator program are at www.haxlr8r.com. 
 Benjamin Joffe, Cyril Ebersweiler, Duncan Turner
 Shenzhen, March 2015 Foreword #HAX
  3. 3. 3 8. AR / VR 9. Drones 10. Robotics 11. Twelve wares to avoid 12. Prototyping 13. Manufacturing 14. China Rising Appendix Foreword 1. Hardware Trends 2. Fundings & Exits 3. Ecosystem Growth 4. Lifestyle 5. Personal Health 6. 3D Printing 7. Smart Home Table of content
  4. 4. 1. HARDWARE TRENDS Source: Aerial Screw by Leonardo da Vinci
  5. 5. 5 Smart watches and trackers, augmented reality, smart home devices, robots and self-driving cars… technology is in the news and on shopping lists. Hardware startups are on the rise across
 existing and new categories. Will every object become ‘sentient’ and connected?
 Will every object become ‘intelligent’ and autonomous thanks to onboard processing? Hardware trends
  6. 6. • Falling prices and advances in computing, sensors, batteries and connectivity have ushered a wave of “sentient” objects. • Those connected devices (smart watches, trackers, sensors…) largely rely on the computing power of smart phones, or the cloud. Sentient and connected #HAX Some “first wave” devices
 with sensors and connectivity Bluetooth, WiFi, Zigbee and cellular
  7. 7. New M2M solutions 7 Spark Electron Cellular dev kit with data plan Raised $21M SigFox Cellular network for IOT Helium M2M network $214k on Kickstarter
 as of Mar 6 ,2015 Raised $4.9MRaised $148.4M
  8. 8. #HAX • Differentiating and maintaining a competitive advantage is harder than ever as components are getting commoditized and products are global from day one. • As a result, a flood of smart watches, activity trackers, filament-based 3D printers and toy drones are entering the market. • The way out might be in new sensor technologies (non-invasive or embedded), design, software, AI and communities of users or developers. • New applications in sports, preventive and personal health are creating emerging behaviors toward human augmentation. Resisting commoditization? Darma Sitting & ECG tracker Mini-quadcopter for $14 on China’s Taobao
  9. 9. Commoditization
 Gloves are off! Who was first? Who’s winning?
  10. 10. Commoditization
 Gloves are off! Who was first? Who’s winning?
  11. 11. Commoditization
 Gloves are off! Who was first? Who’s winning?
  12. 12. • Prototyping is easier and cheaper thanks to various platforms such as Arduino, Raspberry Pi, Spark, 3D printing and more. • Time To Market (TTM) is shortening as the loop is closing between prototyping, crowdfunding, manufacturing, logistics and retail. • “Online-to-Offline” (O2O) is rising: complement an online store with offline fronts or pop-up stores with low or no inventory. Faster to market #HAX Arduino, Raspberry Pi
 and Spark help with prototyping Crowdfunding platforms
 help launch new products “Rent a store front”
 and
 “Inventory-as-a-service”
  13. 13. • With smaller and cheaper MCUs, objects are turning into computers able to process sensor data and run complex algorithms. • Next step might be “apps on things” and have truly “enchanted objects”. Toward enchanted objects? The power of an iPhone
 on your wall On-board face recognition Nest Thermostat Welcome
 IP camera by Netatmo OTTO
 by NextThingCo This camera uses STAK
 technology to run apps
  14. 14. • Today, low-cost automation, 3D printers and robots are expanding to new industries and entering workshops, labs and homes. • Drones have found applications in entertainment, imagery, surveying and exploring deliveries. • Desktop 3D printers have expanded to include materials such as metal, carbon fiber, glass and organic materials such as chocolate, skin and bones! Beyond consumer devices #HAX Will we train sports with robots? Print faster and better Drones for fun, imagery and delivery Search & rescue robot
  15. 15. • http://www.gartner.com/newsroom/id/2819918 Hardware hype cycle:
 Which technologies will get adopted at scale? Source: Gartner #HAX
  16. 16. 2. FUNDING & EXITS
  17. 17. 17 More hardware startups are getting funded, supported by the success stories
 of recent acquisitions. Consumer appeal and venture capital are not always correlated: while consumers might not care about those, defensibility, long-term strategy and unique positioning are strong contributors to successful
 VC funding. Funding and exits
  18. 18. 18 • In 2014, hardware unicorns were on the rise. • The year saw billion-dollar acquisitions of Nest, Oculus, Beats. GoPro went IPO. • Several other recent M&A such as Dropcam, Boston Dynamics, SmartThings, Basis reached hundreds of millions. • In a mere 4 years, the Chinese smartphone maker Xiaomi went from zero to the largest market share in China. Its valuation is now over $40 billion, diversifying into more connected products. • Over 200 hardware investment deals ranging from seed to mega-rounds. Many more unannounced as investors are tip-toeing into the hardware field. Zero to One... billion dollars #HAX
  19. 19. 19 Hardware startups on AngelList Source: AngelList, 2015 • As of March 2015, there were 3,022 hardware startups on AngelList.
  20. 20. 20 Hardware startup investment Source: Tomasz Tunguz, Redpoint Ventures with Crunchbase data, 2014 • There is a notable increase of investment in hardware startups since 2013, in particular for seed and series A.
  21. 21. 21 Top hardware startups funding 0" 100" 200" 300" 400" 500" 600" Magic"Leap" Square" Jawbone" Beats" Xiaomi" Sonos" GoPro" Roku" Anki" Oculus" Lytro" Nest" Fitbit" Razer" Dropcam" Leap"MoKon" Basis" Leeo" 3D"RoboKcs" Zepp"Labs" Withings" PrimeSense" Pebble" iHealth" Ouya" Misfit" FormLabs" Aldebaran"RoboKcs" LiRlebits" Tile" SmartThings" Osmo" SiTeo" Avegant" Whill" Kiva"Systems" August" Makerbot" Note: VC funding amount was found for 38 out of the 41 top hardware companies. M&A Private IPO $M Data source: Crunchbase, Jul 2014
  22. 22. 22 Top hardware startups valuations 0"" 1"" 2"" 3"" 4"" 5"" 6"" 7"" 8"" 9"" 10"" Xiaom i" GoPro" Square"Jawbone" Nest" Beats"M agic"Leap" Oculus" Razer" Kiva"System s"M akerbot"Dropcam " Boston"Dynam ics" Prim eSense" Fitbit" Parrot" Sm artThings" iHealth" Aldebaran"RoboTcs" Basis" $B Note: Known valuations of 20 largest hardware startups, Jul 2014 $46B M&A Private IPO
  23. 23. 23 • Overall VCs fund mostly (1) Serial entrepreneurs (2) Demos with "Wow!" (3) Growth. • This creates a funding gap (“Bridge of Death”) between a demo and growth. As a bridge, startups use crowdfunding, grants, pre-sales,… and get to “real business”. • Most startups plan only their first product, which reduces their chances of funding. • Other stumbling blocks: manufacturing, financing, marketing, distribution. VCs warming up to hardware... to a point
  24. 24. Cash position over time 24 PROTOTYPING PRODUCTION SCALING $ TIME Founders Friends Family Fools Accelerators Angels Grants Crowdfunding Pre-orders Sales VCs POs Banks Bridge of Death
  25. 25. 25 • Since the beginning of the crowdfunding platform Kickstarter, $389M have been pledged across 5,500 technology projects. • Beyond direct sales, crowdfunding is an “awareness enabler” for distributors, investors, developers and supporters. • Several hardware companies were “born” from crowdfunding: Oculus, SmartThings, Pebble, Lockitron. • Technologies aiming for B2B applications can also start with a consumer product to increase their visibility. • Yet, manufacturing remains a barrier. Most unprepared projects ship late, if at all. Crowdfunding is an enabler #HAX
  26. 26. Crowdfunding by top hardware startup 0" 2" 4" 6" 8" 10" 12" Pebble" Ouya" Formlabs" Tile" Oculus" SmartThings" Misfit" Selfstarter $M
  27. 27. 27 • Very few campaigns (if any) are an “overnight success”. • Platform-originated backers are a minority. Creators have to generate the attention via media contacts and community building. Media momentum is hard to achieve yet is key to attract customers. Media have their own schedule, which is rarely yours. • Top campaigns often raised venture funding prior to crowdfunding and spent on advertising, PR, or took a long time to build a meaningful mailing list. Some had celebrity endorsements. • Credibility and genuine enthusiasm seem to matter more than “video quality”. Crowdfunding success is rarely an accident
  28. 28. 28 • At the time of writing the Coolest Cooler, a smart cooler for outdoor parties, was the largest Kickstarter project with over $13M in backing (go Pebble!). It rose from the ashes of a failed first campaign, with better preparation and timing (it first failed a campaign run during the Winter). • The early media coverage of the smartphone printer Prynt by TechCrunch got shared over 60,000 times, generating more than 400,000 views of a casual demo. This helped build a waiting list of over 50,000 people. Prynt raised over $1.5M a few weeks later. Anatomy of a campaign: Two successful projects #HAX
  29. 29. Kickstarter top 10 hardware projects 29 $13.3M $10.3M $8.6M $6.2M $3.4M $3.4M $2.9M $2.8M $2.4M $2.4M COOLEST COOLER Failed its first campaign PEBBLE Sold 10,000 units of another watch and raised $375k pre-campaign OUYA Designed by Yves Behar PONO Co-founded by Neil Young MICRO DASH FORM 1 Raised $500k pre-campaign SCIO Raised $1.9M pre-campaign OCULUS SENSE Raised $10.5M pre-campaign TOP 10 CELEB% CELEB% REPEAT% REPEAT% FUNDED% FUNDED% FUNDED%
  30. 30. Indiegogo top 10 hardware projects 30 $2.3M $2.2M $2M $2M $1.7M $1.5M $1.4M $1.3M $1.3M $1.3M JIBO Raised $5.6m pre-campaign SOLAR ROADWAYS Feasibility in question SKULLY Raised $2.5m pre-campaign SCANADU Raised $2m pre-campaign CANARY Raised $1.2m pre-campaign KREYOS Product issues RITOT Feasibility in question GEEK WAVE AIR TAME TRACKR FUNDED& FUNDED& FUNDED& FUNDED& DOABLE?& NO&CASH& DOABLE?& TOP 10
  31. 31. 31 • Most crowdfunded projects are not suitable for venture capital. Only a quarter of projects above $100k raise VC money. • There is some correlation between backing amount and VC funding. Could one cause the other? Which one? • Eventually, long-term success do not seem to be correlated with crowdfunding amount so far. Crowdfunding to VC funding Source: Flybridge Capital Partners,Aug 2014
  32. 32. 32 • Quirky’s community of inventors and designers pitch ideas online, or help refine other ideas. The selected projects get built by Quirky’s product design staff and sold online and in retail. • Quirky pays back 10% of product sales, split between the initial inventor and other contributors. So far, most projects are fairly low-tech and best-sellers dominate sales. • Quirky raised $185.3M in venture funding. In February 2014, it had close to 300 employees, sales reached $100M in 2014. Crowdfunding ideas: The Quirky approach
  33. 33. 3. ECOSYSTEM GROWTH
  34. 34. 34 The Maker Movement has gathered
 considerable steam over the past few years. How many makers will make the leap
 to become a hardware startup? Ecosystem growth
  35. 35. 35 • More makers, more startups, more events, more funding. Everything is growing. • Hardware is also getting more attention from both media and investors, notably thanks to visible success stories such as GoPro, Nest and Fitbit, and to the rise of crowdfunding platforms. • Yet, the ecosystem is not growing evenly in terms of geographic distribution, availability of tools, support, talent, capital and manufacturing capabilities. Some places are better served than others, and several retain strategic advantages. A bigger ecosystem
  36. 36. 36 • More creators are jumping into hardware thanks to lower barriers of entry. • Hackerspaces, TechShops, Fab Labs and various incubators, public or private like France’s Usine.io offer places for them to work, use tools, learn and meet other creators. They often support the early prototyping stages and act as “pre-accelerators”. Companies like Wearable World also help projects get attention from media, investors and brands. • There are hundreds of Maker Faires, large hardware- related meetups (the ones in SF, NYC, Waterloo, London and Paris have thousands of members each), thousands of Open Source Hardware projects, and a growing number of events related to hardware and IOT. • Platforms like Upverter, SupplyBetter and Hackster.io help source manufacturing partners for later stages. Early stage support for hardware
 is getting more widespread. #HAX
  37. 37. Over a thousand hackerspaces
 are active worldwide 37Source: http://hackerspaces.org/, March 2015
  38. 38. Over a thousand hackerspaces are active worldwide 38Source: Renee DiResta, OATV, 2014
  39. 39. Hundreds of Maker Faires
 are held worldwide every year 39Source: MakerFaire.com, March 2015
  40. 40. Meetup community growth 40Source: meetup.com, March 2015 Hardware Meetup Groups IOT Meetup Groups • The number of meetups and their membership are growing steadily. • Close to 20 groups have over 1,000 members. Events routinely gather hundreds. • The most active locations are San Francisco, New York, London, Bangalore and Paris. • A strong second group is composed of Barcelona, Tel Aviv, Stockholm and Austin (TX), Reston (VA), Washington (DC).
  41. 41. Popular IOT and Hardware meetups Source: meetup.com, March 2015 41Source: meetup.com, March 2015 # Meetup Location Members 1 IOT London UK 4,712 2 SF HW Startup USA 4,086 3 IOT Bangalore INDIA 3,219 4 IOT SF/SV USA 3,074 5 Hardwired NYC USA 3,028 6 SF IOT USA 2,841 7 IOT Paris FRANCE 2,397 8 NYC HW Startup USA 2,319 9 IOT Central NYC USA 2,013 10 NOVA Makers (Reston, VA) USA 1,979 11 IOT Israel ISRAEL 1,776 12 Sensored (SF) USA 1,680 13 IOT Barcelona SPAIN 1,594 14 HacDC (Washington, DC) USA 1,342 15 IOT Stockholm SWEDEN 1,276 16 SF Wearables USA 1,064 17 Austin HW Startup USA 1,052 18 HW Startup Lab (London) UK 1,046
  42. 42. 42 • At the end of 2014, there were over 2,000 startup accelerators worldwide. Their structures vary: investment, corporate, sponsored, non-profit… with different degrees of alignment with startups. • Most focus on software. As a result, hardware startups are often isolated and can’t get the guidances and tools they need to prototype and build products at scale. • Hardware startups increase their chances by connecting with suitable ecosystems as well as building manufacturing and supply chain skills. Most incubators and accelerators
 can’t answer the needs of hardware startups #HAX Living next to an electronics market will speed up prototyping
  43. 43. Makers and startups 43 Makers Build for fun, education, goodwill, etc… Maker
 Pros Turn their hobby into a business.
 Often create tools for other (merry) makers. Inventors Invent and sometimes license their ideas.
 Rarely full-time. Hardware
 Startups Born to scale.
  44. 44. 44 • BEGINNERS:
 Focus on proof-of-concept. • EXPERIENCED:
 Focus on manufacturability
 and supply chain.
 Reduce bill of materials, care about component availability and life cycle, integrate supply chain. • PROS:
 Focus on logistics, distribution
 and cash flow.
 Find ways to finance inventory, protect margins and scale up. Required skills of hardware startup founders #HAX
  45. 45. Things get real with prototyping 45 Look-like prototype An object representing the final product. Does not work.
 Manufacturability or cost are often not considered. Proof of Concept A device performing - to some extent - the intended functions. Work-like Prototype A prototype that works.
 Size, design, cost and performance are secondary concerns. Look-like-work-like Prototype Works, with a design close to what the final product. Manufacturable Prototype (DFM) Works, with design, manufacturability and costs carefully considered. It is more or less identical to the final product. Pre-production prototype One of few units coming out of the assembly line prior
 to full production.
  46. 46. From idea to product:
 Leap Motion Controller 46
  47. 47. 47 • “Hardware is hard”.
 But what is hard exactly in hardware?
 Once the R&D part is covered, the riskiest parts are often in reducing costs to make the product viable, and handling manufacturing. • Crowdfunding backers typically invest in early prototypes (when not mere renders or form factors). Those might not have completed the critical R&D and feasibility parts. • Backers, media and investors are often wowed by demos and underestimate the difficulties of both manufacturability and manufacturing.
 And that’s when a product can be made at all! • All would benefit from a better understanding of the milestones the creators have cleared, so as to grasp both the level of risk and the level of support needed. Risk in hardware startups: Does it work? Can it be made? Can it scale? Some parts can be 
 hard to source #HAX
  48. 48. 4. LIFESTYLE Source: Pokeball, Pokemon animation series
  49. 49. 49 Many daily objects are getting fitted
 with sensors and connectivity Can the market sustain the many
 smart watches and trackers? Eventually, “wearable” is not a category,
 what matters is the problem the device is solving. Lifestyle devices
  50. 50. Booming of smart watches and trackers 50
  51. 51. Are wearables going mainstream? 51
  52. 52. 52 • Over 40 companies offer Android Wear smart watches. Samsung, Motorola, Sony, LG, Asus and others shipped
 an estimated 720,000 units in 2014 (source: Canalys, 2015.2). • 7-years old startup Pebble cut prices in 2014 and reached over 1M units since its introduction. It added Android Wear app compatibility, opening up its ecosystem but eroding differentiation. • Initial orders for the Apple Watch due to launch in April 2015 are estimated between 5 and 6 million. Will the market be big enough for all the smart watch makers? Differentiation is becoming difficult #HAX
  53. 53. First generation trackers disappoint Will the next generation fare better? 53 Many users gave up on the first generation of devices Will the next stick and be “China-worthy”? #HAX
  54. 54. Evolution of trackers: Toward fashionable or invisible devices 54 Up by Jawbone FuelBand by Nike Activité by Withings Shine by Misfit Swarovski Shine by Misfit Charge by Fitbit Raised $66M Raised $520M Team reportedly fired Raised $63M#HAX
  55. 55. Commoditization? China’s Xiaomi launches a $13 activity tracker 55 Mi Band by Xiaomi Yours for $13 (mostly in China so far) • Step count • Calories burned • Sleep tracking • Unlock phone • Incoming call alerts • 30 days battery life • Water resistant
  56. 56. Sports tech: Multi-purpose and focused trackers 56 Zepp Golf / Baseball / Tennis Challenger by Shot Stats Helios Cycling Syrmo Skateboard Trace Surf / Snow / Skate Raised $15M $120k on Kickstarter$103k on Kickstarter Notch Motion capture #HAX
  57. 57. Pet tech: In many places, there are more pets than babies! 57 Petcube Pet communication Raised $21M Whistle Dog activity monitor Bistro Feeder $251k on KickstarterRaised $240k #HAX
  58. 58. Payment technologies 58 Raised $590.5M Square Mobile payment & services Coin Multi-cards device Raised $15.5M #HAX
  59. 59. Smart tags 59 iTraq global location tag (using cellular triangulation) $145k on Kickstarter as of Feb 22, 2015 Tile
 Bluetooth tag $2.6M in crowdfunding Raised $13.2M#HAX
  60. 60. Music tech: From learning to daily practice 60 gTar Midi smart guitar Roadie Automatic guitar tuner $353k on Kickstarter $178k on Kickstarter#HAX
  61. 61. 5. PERSONAL HEALTH Source: Mr Spock with medical Tricorder, Star Trek TV series
  62. 62. 62 New low-cost and non-invasive sensors are enabling
 a new wave of personal health devices. Personal health
  63. 63. Personal health devices 63 SCiO Molecular sensor Scout by Scanadu ECG, breathing, Temp Clarity Air quality monitor Darma Sitting & ECG tracker Wink by Kindara Fertility monitor $2.8M on Kickstarter Raised $14.5M $1.7M on Indiegogo Raised $14.1M $225k on Kickstarter Raised $1.6M June by Netatmo UV tracker Raised $5.8M#HAX
  64. 64. 6. 3D PRINTING
  65. 65. 65 3D printing has expanded from basic prototyping with plastic to numerous materials. Future printers might produce commercial-grade products and allow for micro-manufacturing. Toward more mature technologies
  66. 66. • 3D printing basics: • FDM (Fused Deposition Modeling) uses heat to extrude a filament of plastic material. • SLA (Stereolithography) uses a beam of light to curate a photo-reactive resin. • New developments: • Cheaper printers, portable printing pens. • New desktop technologies. • New materials, multi-material prints, multi- color prints, even printing houses! • Toward factories with 3D printing farms? 3D printers Colorful filament
 PLA (polylactic acid) SLA cures polymer
 with light #HAX
  67. 67. Makerbot Acq. by Stratasys for $403M FDM: the race to the bottom $2,899 Micro $3.4M on Kickstarter $349 pre-order Buccaneer $1.4M on Kickstarter $1,099 pre-order $1.6M on Kickstarter Flux $599 on KS iBox Nano $457k on Kickstarter $299.99 £255k on Kickstarter Overlord $699 #HAX
  68. 68. CreoPop First with cool ink $2.3M + $1.5M on Kickstarter 3Doodler First 3D printing pen Lix Smallest pen $205k on Indiegogo£732 on Kickstarter FDM: printing pens #HAX $99.99 $139.95 pre-order $119 pre-order 04.2015?
  69. 69. Pegasus $2.9M on Kickstarter Form 1+ by FormLabs Ember by Autodesk $820k on KickstarterOpen source SLA: the new frontier for desktops? $3,299 $5,995 pre-order $2,999 pre-order #HAX
  70. 70. Sintratec SLS (Laser sintering) Kast Retina casting $213k on Indiegogo New technologies Prints a variety of materials ranging
 from plastics to ceramic or metals Launching in 2015 10x faster than classic FDM, with higher quality, allowing production runs #HAX
  71. 71. New materials Metal Carbon fiber Chocolate Bio ink Skin & Bone Sandstone Glass Medicine Fabric #HAX
  72. 72. New applications OwnPhones Custom 3D printed ear buds $767k on Kickstarter#HAX SOLS Custom 3D printed in-soles Raised $19.3M
  73. 73. Printing houses: A giant 3D printer builds 10 houses in one day #HAX
  74. 74. 7. SMART HOME Source: The Jetsons, ABC
  75. 75. 75 Access, indoor comfort, smarter appliances…
 the house is getting connected. Will anyone win the battle for the home hub?
 Will things be interoperable? Google is making moves toward owning home data; the market is waiting for Apple’s move. The smarter home
  76. 76. Thermostats 76 Acquired by Google for $3.2B Nest Ecobee Raised $16.1M #HAX
  77. 77. Hubs 77 SmartThings Acquired by Samsung for $200MAcquired by Google Revolv #HAX
  78. 78. Security 78 Dropcam WiFi IP camera Protect Smoke detector by Nest Ring Smart doorbell Point House sitter Acquired by Google for $555M Welcome by Netatmo Designed by Philippe Starck Raised $5.8M#HAX
  79. 79. Air quality 79 CubeSensorsWeather Station by Netatmo Designed by Philippe Starck Raised $5.8M Raised $700k#HAX
  80. 80. Door locks 80 Bolt by Lockitron August Raised $10M Designed byYves Behar Raised $2.2M via crowdfunding #HAX
  81. 81. Lighting 81 Hue by Philips Bolt by Misfit Yeelight by Yeelink #HAX
  82. 82. Appliances 82 Smart body analyzer by Withings Nomiku Connected sous-vide cooking device Niwa Hydroponic system #HAX
  83. 83. Sleep trackers 83 Beddit Sense $503k on Indiegogo Raised $8M $2.4M on Kickstarter Raised $10.5M Luna Smart bed cover $936k on Indiegogo
 (as of March 6, 2015)#HAX
  84. 84. Home sensor networks 84 Xiaomi Home sensors Mother #HAX
  85. 85. 8. AR & VR #HAX Source: Denno Coil, NHK
  86. 86. 86 Most augmented and virtual reality products
 are not commercialized yet. Will Christmas 2015 be their coming of age? Will 2015 be the year of AR/VR?
  87. 87. 87 • The most iconic AR project has just been discontinued: Google decided to stop the production of Glass less than two years after launch. • Glass found a number of niche applications but faced severe criticism regarding privacy and failed to reach mass market adoption, partly due to its high price tag of $1,500. TIMELINE 2013.04: Glass is introduced to “Explorers”
 2014.05: Glass open to the general public
 2015.01: Google stops producing Glass Augmented Reality: Google Glass #HAX
  88. 88. Augmented Reality: Top players 88 Magic Leap Raised $592M Hololens by Microsoft SmartEyeGlass by Sony Pre-order: $840 Hired Neil Stephenson Sci-Fi author of “Snow Crash” #HAX
  89. 89. Augmented Reality: Notable crowdfunded projects 89 Meta $194k on Kickstarter Raised $23M from VC CastAR $1M on Kickstarter Skully $2.4M on IndieGoGo Hired Steve Mann, pioneer of wearable tech as Chief Scientist Founded by former Valve Software employees Augmented reality bike helmet #HAX
  90. 90. Virtual reality: Top players 90 Project Morpheus by Sony OSVR by Razer Open Source VR Oculus $2.4M on Kickstarter $2B acq. by Facebook #HAX Vive VR by HTC and Valve Includes controller and laser for sensors
  91. 91. Samsung Gear VR Powered by Oculus Virtual reality: Other notable projects 91 ANTVR $261K on Kickstarter Google Cardboard Low-cost VR iPhone VR headset patented by Apple #HAX
  92. 92. 92 • Giroptic’s camera will be the first 360 degree video supported by YouTube. • The availability of such content will make virtual reality an increasingly attractive proposition. Virtual Reality: Solving the creation & distribution of 360 video #HAX
  93. 93. 93 • Most virtual reality experiences are limited to display. Interfaces like keyboard or mouse are not convenient. • The Leap Motion controller can be combined with the Oculus Rift to bring a user’s hands into the virtual space. Virtual reality: Leap Motion solving the “hands” problem in VR #HAX
  94. 94. Virtual reality:
 Capturing the world in 3D 94 Structure Sensor $1.3M on Kickstarter Project Tango by Google Raised $7M #HAX
  95. 95. 9. DRONES Source: Viper probe droid of Star Wars Episode V: The Empire Strikes Back, Lucaslifm
  96. 96. 96 Drones have found applications
 in entertainment, imagery and surveying. E-commerce giants Amazon and Alibaba and others
 are looking into using drones for deliveries. Piloting, handling obstacles as well as
 autonomous flight remain challenging. Regulations are slowly catching up. The state of drones
  97. 97. Parrot Entertainment Some drone applications 97 SkyCatch Enterprise / Surveying 3D robotics Imagery / UAV Cirque du Soleil Artistic performance #HAX Raised $85M Raised $19.7MMarket cap: $247M (March 2015)
  98. 98. Drone deliveries: Amazon and Alibaba 98 Alibaba Successful trial in Feb 2014 Amazon US regulations don’t allow
 deliveries by drone so far Tea packages were delivered
 to areas close to distribution centers in Beijing, Shanghai and Guangzhou FAA proposed rules that include a knowledge test, registering the drone and stay under 500 feet and within line of sight. Source: Techcrunch, Feb 2015#HAX
  99. 99. New technologies 99 Gimball Collision-happy inspection robot
 developed at EPFL Distributed Flight Array (DFA) Self-assembling flying robot
 developed at ETH Juggling quadcopters Developed at ETH Construction robots Developed at ETH #HAX
  100. 100. Drone incidents 100#HAX
  101. 101. 10. ROBOTICS Source: JARVIS AI system in Iron Man, Marvel Movies
  102. 102. 102 A robot can be described as
 “A machine performing complex actions
 in the physical world”. Most don’t look like humans but enjoy
 increasing levels of autonomy and intelligence. Today, low-cost and smart robots
 are expanding to new industries
 and entering workshops, labs and homes. Robots are coming
  103. 103. Robotics before: Expensive, simplistic or fictional 103#HAX
  104. 104. Desktop robotics: Low-cost robots for office, workshop and lab 104 Voltera PCB Printer Opentrons Lab Robot Othermill CNC Machine Taktia Power Tool Makerbot 3D Printer Katia Robotic arm #HAX
  105. 105. Service robotics: Robot cooks, butlers and waiters 105 Robot waiter Pengheng Space Capsule Hotel Shenzhen, China “Butlr” butler robot Aloft Cupertino Hotel Hamburger-making robot by Momentum Machines #HAX
  106. 106. Service robotics: Guards and sales assistants 106 OSHbot by Lowes Sales assistant robot Knightscope Security guard robots Raised $6.7M from VC#HAX
  107. 107. Service robotics: Cleaning and painting 107 Avidbots Commercial cleaning Rational Robotics Autonomous painting booth #HAX
  108. 108. Domestic robotics: Autonomous cleaners & lawn mowers… 108 Husqvarna Lawn mower Roomba by iRobot Vacuum cleaner First version sold in 2002 >10M units sold since start First robot sold in 1995! #HAX
  109. 109. …are getting commoditized quickly 109 They can now be sourced from China for less
 than a quarter of the US retail price. Competition is getting tough for simple robots like vacuum cleaners and lawn mowers as they go mainstream. #HAX
  110. 110. Robots might cause new problems 110#HAX
  111. 111. Domestic robotics: Social robots 111 Nao and Pepper Social robot by Aldebaran Robotics Jibo Family robot Raised $30.7MAcq. by Softbank, $100M Double Telepresence robot by Double Robotics
  112. 112. Entertainment robotics: Toys and drones 112 Mousr Robotic mouse for cats by Petronics Sphero & OllieVarious drones by Parrot #HAX
  113. 113. Education robotics:
 From research labs to schools and homes 113 Lego Mindstorms Makeblock Robot kit CELL Modular robot #HAX
  114. 114. • ROBI is a robot kit created by Tomotaka Takahashi from ROBO-GARAGE. It is sold via a weekly magazine published by De Agostini. • Readers receive a few parts every week with detailed information. 70 issues are needed to build the robot ($20/issue, total: $1,400). • It sold an estimated $100M by Jan 2015. ROBI: DIY subscription robot #HAX
  115. 115. Medical robotics: From surgery to soft robotics 115 Da Vinci Surgery robot BabyBe for mother/infant communication for premature babies #HAX
  116. 116. 116 • Google acquired several companies involved in robotics, vision and control. • Several of the projects were financed by DARPA. Google goes robotics Big Dog by Boston Dynamics SchaftAtlas by Boston Dynamics #HAX
  117. 117. Human augmentation: Bionic limbs 117 ReWalk Ekso Bionics iWalk Touch Bionics #HAX
  118. 118. Drones: Underwater and surface robots 118 OpenROV Open Source Underwater Exploration Robot Protei Oil spill cleaning robot $112k on Kickstarter#HAX
  119. 119. Versaball Jamming gripper
 by Empire Robotics Other robotics novelties 119 “You’re just as good as your grippers” Robotics proverb SmartBird by Festo UHTTR-1 DIY ping-pong robot #HAX Primer v2 Cycling robot by Masahiko Yamaguchi
  120. 120. Industrial robotics: Robots for factories and warehouses 120 Baxter Versatile factory robot by Rethink Robotics Kiva Systems Warehousing robots Acquired by Amazon for $775M 15,000 robots are in operation across Amazon’s 50 US facilities Source: CNET, Nov 2014#HAX Komatsu Driverless trucks Over 40 unmanned trucks are operated by Australia’s mining giant Rio Tinto.
 Each loaded truck weights over 500 metric tons. Source: Mining.com, Sep 2013
  121. 121. Transportation robotics: Self-driving cars 121 RoboCar MEV-C by ZMP Self-driving car by Google Self-driving car by BMW Self-driving car by Tesla #HAX
  122. 122. Whill Segway Solowheel Hovertrax Not exactly robots but still interesting: Personal mobility solutions 122 Zboard Copenhagen Wheel #HAX
  123. 123. 123 • The market was an estimated $800 million in 2013 and might grow 20x to over $16 billion by 2020 (Source: WinterGreen Research, January 2014). • According to The Robot Report (July 2014): + Robotic harvesting, irrigation, pruning, weeding and thinning devices are being field-tested all around the world. + Robotic spraying and seeding have been going on in Japan and Australia for years. + Driverless tractors are getting started. + Robotic cow milking is growing. + Nurseries are beginning to use pick-and-place robots. + Aerial observation robots might support agricultural precision.” Agricultural robotics: Crops, cows and calves driverless tractor robotic cow milking picking strawberries#HAX
  124. 124. 11. THE 12 “WARES” TO AVOID wow such excite very hardware so future
  125. 125. 125 There are many ways to fail at a hardware project. Getting the wrong market, timing or positioning
 are enough to wreck a startup. Avoid the following twelve “wares”. Recognizing good hardware startups
  126. 126. 126 "Happy families are all alike;
 every unhappy family
 is unhappy in its own way.” Leo Tolstoy, Anna Karenina Anna Karenina Principle
  127. 127. 127 1. NICHEware
 2. EASYware
 3. SAMEware
 4. SOLUTIONware
 5. VAPORware
 6. LAMEware
 7. FAILware
 8. LATEware
 9. LOSSware
 10. BOREware
 11. FUTUREware
 12. LOCALware Beware of those 12 “wares” Small business
 Not defensible
 Weak positioning
 Solution looking for a problem
 Can’t be made
 Compromised beyond reason
 Building the wrong thing
 No margins
 No stickiness
 No market yet
 Too tied to local conditions
  128. 128. 128 • Too small market.
 No chance of a larger one. • Includes FUNware and ARTware. 1. NICHEware FUNware: Rubik’s cube solving robot
 Guinness world record holder ARTware: One of Japan’s teamLab
 outstanding tech/art installations NICHEware: This robotic trash can
 will catch some of your throws#HAX
  129. 129. 129 • Too easy to copy. • Trivial engineering and market demand will attract competition and destroy margins. • Defensible intellectual property is not limited to patents: it can be software, trade secrets or a community (such as Makerbot and GoPro). 2. EASYware Tile keeps track of your things with bluetooth
 It now has droves of competitors Fever Smart
 Smart thermometer on Indiegogo#HAX
  130. 130. 130 • Lack of differentiation. • A weak positioning will lead to limited sales, even after an initial launch via crowdfunding. • Your “better mousetrap” needs to be multiple times better in some way (price, speed, usability…) than existing solutions to capture market share. 3. SAMEware Over 50 companies launched 3D printers
 using crowdfunding and raised over $100k Source: Flybridge Capital Partners, 2014.06#HAX
  131. 131. 131 • A solution looking for a problem (“a hammer looking for nails”). • Academic research often falls into this category. 4. SOLUTIONware “Cubes could transform into a chair or a desk”
 Source: MIT News, Oct 2013 “They’re trying to get it in the hands
 of engineers with big ideas”
 Source: Engadget, Oct 2014 “A glimpse of a future
 […] that still feels far away”
 Source: TheVerge, Jul 2014 Lytro
 Light field photography camera.
 Now shifting from cameras to virtual reality.
 Raised $140M M-Blocks
 Self-assembling robots from MIT Hendo’s hoverboard
 $510k on Kickstarter #HAX
  132. 132. • Can’t be made. • Includes NAIVEware
 and SCAMware 5. VAPORware 132 HUVr
 Hoverboard Ritot
 Projection watch
 $1.6M on Indiegogo “A clear cut example of a few guys
 with a neat idea grossly underestimating
 what it takes to develop a product.”
 Source: DropKicker, Aug 2014 “Tony Hawk has now issued a video apology
 for his role in the HUVr Board prank”
 Source: Heavy.com, Mar 2014 “Never attribute to malice that which is adequately explained by stupidity”
 Hanlon’s Razor Ada by Triggertrap
 Camera trigger
 for high speed photography
 £290,386 on Kickstarter The creator posted “How our $500k Kickstarter campaign crashed and burned”, canceling the project and refunding the remainder of the money to backers.
  133. 133. 133 • Under-delivering. 6. LAMEware “Backers found problems with HW & SW,
 including a lack of several advertised features.”
 Source: PC World, Sep 2014 “The bulky size [and the need] to have
 the app open negates any time-saving”
 Source: Snazzy Labs, Nov 2014 Kreyos smart watch
 raised $1.5M on Indiegogo Ring bluetooth controller by Logbar
 Raised $880k on Kickstarter. GoBe calorie counter Raised $1.1M on Indiegogo “It does not deliver on its most exciting feature”
 Source: Engadget, Feb 2015
  134. 134. 134 • Successfully building the wrong thing. • This happens to small and large companies alike. • Bigger companies might ship bigger failures. 7. FAILware Microsoft Tablet PC (2002)
 “The tablets we had done weren’t as thin,
 they weren’t as attractive.”
 Source: Bill Gates, Jul 2012#HAX
  135. 135. 135 • Validated a market but woke up competitors. • Delays mean sales start later, putting pressure on cash flow. • Delays also mean competitors might enter the market. • In some cases, delays lead to obsolescence. 8. LATEware Their 14,000+ backers waited over 2 years.
 Meanwhile, competitors entered the market. Lockitron
 $2.2M in crowdfunding. #HAX
  136. 136. 136 • Minimal or negative margins. • Healthy margins allow to cover the bill of material, tooling, returns, salaries and promotion costs. Retail also takes a considerable share. • Some products might use a different business model allowing them to offer hardware for cheap or for free (maybe even pay users?). 9. LOSSware “You will be receiving Shru at cost price.” Creators will have to ship
 over 4,500 units at cost. Shru
 Electronic cat toy
 Raised $171k on Kickstarter #HAX
  137. 137. 137 • People stop using them. • Category pioneers often have flaws. Later versions might overcome them and help grow a market. • For wearables, the next generation of devices might fix some key issues like battery life and live feedback and trigger mass market adoption. 10. BOREware #HAX
  138. 138. 138 • Ahead of its time. • Being too innovative can be a death sentence. 11. FUTUREware Google Glass
 Got discontinued within 2 years of launch. Usability, lack of “killer apps”, price
 and social barriers prevented it
 from reaching the mass market. Nabaztag (Violet, 2005) 
 Connected device Aibo (Sony, 1999) 
 Robotic pet#HAX
  139. 139. 139 • Too tied to local conditions. • Peculiarities of local ecosystems can prevent successful expansion. 12. LOCALware Japan’s flip phones still represented over a quarter of all shipments in 2014.
 For a decade, those phones have had very advanced functionalities including apps, mobile TV and NFC payment.
 
 The isolated technological path followed by Japan is now often called “Galapagos Syndrome”. Phone with electric shaver
 Part of the shanzhai “mass production artwork”
 production system in China Safety regulations, IP and logistics will prevent
 exporting to most countries. #HAX
  140. 140. 12. PROTOTYPING Source: Laser cut robot, Trotec
  141. 141. 141 Prototyping has become dramatically faster
 and cheaper for electronic products. How far are we from building hardware
 at software speed? Prototyping 2.0
  142. 142. • Barriers for prototyping are falling. • Mechanical: 3d printing, laser cutting, CNC machining, vacuum forming… • Electrical/SW: some prototyping boards are now production-grade, circuit printers coming to market. • Electronics: prices falling, commoditization. • Robotics: DIY / open source kits. • Connectivity: chips, modules, smartphones, cloud. Prototyping 2.0 #HAX
  143. 143. • After early prototyping, using 3D printers quickly becomes a time sink. • In addition, most additive techniques can’t be used in manufacturing. • So once form factor is clarified, use real CAD data and move away from 3D printing. Outsource early in order to polish communication skills. • Leverage factory expertise and blend prototyping, DFM and manufacturing, toward making a real product. • Leverage the supply chain and take into account component availability and life- cycle. 3D printers usage stops at proof of concept Time spent fixing a printer
 or re-doing prints can be better spent elsewhere #HAX
  144. 144. • Lots of mechanical parts can be found off-the-shelf or through kits. • If in China, get any custom part in a few days, including motors. Worldwide delivery can also be arranged for many parts, including PCBs. • Below, the parts included in the Makeblock robotic kit allows the building of fully functional machines such as a 3D printer or a laser cutter. Robotics prototyping:
 DIY, Open Source, etc. 3D printer Plotter / CNC / Laser cutter #HAX
  145. 145. Electronics prototyping An OS built for smart devices Hackable Wi-Fi and Cellular modules Bluetooth programming platform #HAX
  146. 146. • The spread of prototyping and educational platforms contribute to the growing number of hardware startups. A slice of Pi for everyone: 5M units sold in 3 years since launch 0 1 2 3 4 5 2012 2013 2014 2015 Jan Nov Jun Feb Feb
  147. 147. Circuit prototyping:
 Print circuits, dispense solder paste, reflow #HAX
  148. 148. 3D printers usage stops at proof of conceptZero to final prototype in 3 months Prototyping speed is accelerating: what used to take a year
 can be done in a few months. #HAX
  149. 149. 13. MANUFACTURING Source: Modern Times, Charles Chaplin
  150. 150. 150 Manufacturing is often where hardware startups fail. Integrating the supply chain early in the development process can dramatically increase odds of success. Manufacturing
  151. 151. “Get out of the building” - Lean startup principle “Get on the factory floor” - Lean hardware principle Lean Hardware Startup #HAX
  152. 152. • To start: de-risk their supply chain to ensure supply of all parts. • Further: own relationships to be first-class customers and even block competitors from sourcing the best parts. • Eventually: own their assembly (or control it like Apple with Foxconn): control processes and machines. What every hardware startup wants… “Apple has exclusive deals with hardware manufacturers for the best parts for iPad.
 […] HP could only source the second best.”
 
 Source: TheNextWeb, Aug 2011 Can’t touch this “Apple Bought $578M Worth Of Sapphire In Advance.”
 
 Source: TechCrunch, Nov 2013 Apple’s sapphire #HAX
  153. 153. • Startups are not like Apple: volumes, cash, influence, (very) long runway. • “Apple quality” takes time and is more pricey (machined aluminum? laser-made holes? etc.). • Seeking “perfection” can cause important delays and shorten runway. …and can’t have #HAX
  154. 154. • Creating a product that has never been made before is a difficult task. • Design with the factory: avoid mistakes
 thanks to “Design from manufacturing”. • Manufacture in the right location
 with access to the relevant supply chain. • Build with the right partner: toy factories are great to make toys, less so for robots. • Launch fast and launch early: improve your product and supply chain during and between runs, on the factory floor by manufacturing in small batches. Leveling the playing field:
 Partnering with factories #HAX
  155. 155. • Without hardware and manufacturing expertise a company is at risk of becoming a “hollow company”, unable to plan or discover improvements. • Successful design and manufacturing requires knowledge of the tools. • Manufacturing issues are hard to solve at a distance or with middlemen: improvements and discoveries can also be made on the factory floor. • Using middlemen makes it harder to adjust your supply chain. Startups need in-house experience and
 “Get on the factory floor” #HAX
  156. 156. “The problem is that we don’t understand the problem” - a hardware startup. Solving problems is easier on site #HAX
  157. 157. • Mastering the supply chain requires finding the original source for everything: is this supplier really THE supplier? • "Parachute manufacturing” - e.g. a week overseas to source a contract manufacturer - is rarely enough due diligence to select a reliable long-term partner. • The depth of the supply chain, combined with knowledge of manufacturing and materials are long-term strategic advantages against rapid commoditization. Supply chain due diligence and management “The biggest roadblock to the success
 of hardware startups isn’t money, machines, or material: it’s finding
 the right partners and people
 to implement their vision. Would you hire an agent to shop
 for dinner or buy clothes for you? […] After all, “It’s people! - supply chains are made out of people!” - Andrew “bunnie” Huang,
 bunnie studios blog, Dec 2014 #HAX
  158. 158. • PCB assembly: the vast majority is now fully automated. • Injection molding & CNC machining: operated with little overhead, high throughput and robot arms. The dream of a fully automated assembly line
 is getting closer by the day. The automation equation …and 1 million robots…Less employees… … typing on a touchscreen.#HAX
  159. 159. • Prototyping will remain easier when located next to strong component supply chain. • Some automated small batch manufacturing (total <1k units) could gain a local cost and time advantage thanks to high-quality prototyping tools used as “printing farms”. • Product assembly might become more distributed to facilitate shipping and on-time deliveries. Human and robotic assembly lines will get closer to their customers. One future: distributed manufacturing? #HAX
  160. 160. 14. CHINA RISING
  161. 161. 161 China used to be known for only making
 cheap copies at scale. Today’s china also makes the world’s
 highest quality products. The benefits of China’s supply chain for speed, costs and scaling from a prototype to millions of units
 is now open to startups. A tale of two Chinas
  162. 162. • Copying China’s electronics supply chain would be as hard as copying Silicon Valley’s ecosystem. • From rare earth production used in electronics (China produces at least 70% of the world’s rare earth elements) to electronics manufacturing, assembly and supply chain, it is unlikely to move anytime soon. • Instead, combine China’s supply chain & manufacturing know-how with global market access. China is also a huge consumer market for electronics and building things there helps understand that. The hardware world is not flat #HAX
  163. 163. • Shenzhen, the world capital for electronics and supply chain is now seen as the “Silicon Valley for Hardware”. • Shenzhen’s ecosystem is also used to prototype better, faster and cheaper: design with local components and take advantage of the 24-hours PCB delivery. Does all hardware lead to Shenzhen? #HAX
  164. 164. “The city has a complete ecosystem of low-cost labor, massive factories and leading manufacturing technologies, making it able to turn out almost any kind of hardware on a large scale Both Shenzhen and Silicon Valley have a critical mass. We’re most likely to be successful connecting with Shenzhen than competing with it head on.” “A week in Shenzhen is worth a month in the Valley.”
 - a hardware startup founder Connecting with Shenzhen Joichi Ito
 Director
 MIT Media Lab #HAX
  165. 165. The “Silicon Valley for Hardware” #HAX
  166. 166. Googling ‘Factory’ in Shenzhen
  167. 167. Shenzhen map for makers Source: Huaqiangbei map for makers HAX • The electronics market is made of over a dozen multi-story buildings filled with shops selling components of all kinds. • Most shops are tied to factories and can supply from 1 to thousands of parts.
  168. 168. Shenzhen electronics market Source: Dangerous Prototypes SEG electronics market Shops in the SEG electronics market Magnets of various sizes Soldering workshop in mobile repair shop
  169. 169. Top universities building closer ties
 with Shenzhen • Several leading research institutions are building ties with Shenzhen’s unique ecosystem. • Notably, Berkeley, MIT’s Media Lab and Center for Bits and Atoms have taken steps in that direction. • The global Fab Lab conference Fab 12 will be held in Shenzhen in 2016. #HAX
  170. 170. • Barriers to get to market have gone down (with crowdfunding, e-commerce) and OEMs are trying to go up the value chain. • What they lack is design capabilities, brand recognition, sales & marketing
 and customer service. • Design capabilities: some are hiring designers and acquiring global talent. • Brands: some are buying well-known or distressed brands to get credibility, distribution and intellectual property. • Investment: some are investing in other companies, including startups. Rise of the OEM The animatronic pet PLEO was acquired by its Chinese OEM, JETTA after filing for bankruptcy Famed designer Yves Behar sold a 75% stake in his firm Fuseproject to the Chinese communication group BlueFocus for $46.7M #HAX
  171. 171. • Several “creators” simply rebrand or repackage products sourced on Alibaba. • Some are visible on crowdfunding platforms. “ALIware” as a new trend? #HAX
  172. 172. • Smartphone giants like Apple and Samsung aside, very few foreign hardware startups have performed well in China. • Launching in China requires to adapt to an entirely different ecosystem. • This includes different marketing practices, distribution channels and sometimes even a different revenue model. Foreign hardware startups in China Misfit received a $40M investment from Xiaomi and other investors. China is now the largest market for its Shine activity tracker. OUYA, the android-based game console received a $10M investment from Alibaba.#HAX
  173. 173. 173 • The “Pressy” smart button (inserted in the audio plug of a smartphone to create a shortcut for services) was copied 3 times in China with successive price drops until it became free with a new business model. • The Internet company Qihoo gave away 1 million units to college students to acquire users for its mobile services. Extreme commoditization: From Kickstarter to Free in 10 months $27 2013.10 PRESSY $3 2014.1 SPEED BUTTON $1 2014.4 MIKEY by Xiaomi FREE 2014.8 SMART BUTTON by Qihoo $34,000$695,138 #HAX
  174. 174. • Suffering from competition with large local players (Xiaomi, Huawei, Lenovo, Midea, ZTE, TCL…). • Extremely strong execution and iteration. • Lack of effort in “disruptive” R&D. Chinese hardware startups $125M in revenue DJI eHang Raised $10M iHealth Since 1995#HAX
  175. 175. • Launched by a team of veterans pursuing a platform/software distribution strategy rather than pure hardware profits. It sold 61 million phones in 2014, claiming China’s #1 spot. • It sells inventory online directly to consumers as soon as it’s made, with no advertising and relatively low margins. This approach allows for lower retail prices. • Xiaomi leverages its community of users to guide product development. The company is not a mere phone brand but a distribution channel to the aspiring middle class. • In Sep 2013, Xiaomi hired Hugo Barra from Google to head its international expansion. The Xiaomi case: How it became China’s #1 smartphone maker Founder of Xiaomi Lei Jun Mi Note A phablet for 368 USD Hugo Barra VP of International, Xiaomi#HAX
  176. 176. • Xiaomi is commoditizing numerous hardware products. • It intends to launch 100 hardware products with OEMs and investments (Misfit, iHealth, Yeelight etc.). • It already offers smartphones, tablets, power banks, activity trackers, headphones, TV box, 4K TV screen, smart home sensors & connectors, webcam and more Xiaomi expands beyond smartphones, commoditizes more hardware devices #HAX
  177. 177. “Xiaomization” 24 USD16 USD13 USD 64 USD 18 USD 16,000mAh
 power bank 1 USD Smart button Miband tracker Bluetooth speaker IP camera Action camera 41 USD Headphones 639 USD 4K TV screen #HAX
  178. 178. Xiaomi’s answer to GoPro? #HAX • In March 2015 Xiaomi launched a new action camera built by its camera OEM partner. • With its phones, Xiaomi captured the middle market, notably from Samsung and some high-end from Apple. • With its action camera, Xiaomi might capture market share from GoPro and create a new market segment. Xiaomi offers many different mounts Source: TechInAsia
  179. 179. APPENDIX Source: Squid (Super conducting QUantum Interface Device), Strange Days
  180. 180. 180 • This report is for informational purposes only and makes use
 of various public and non-public sources. • HAX is an investor in several startups mentioned in this report (www.haxlr8r.com/companies/). • SOSventures is an investor in HAX and in several startups mentioned in this report (www.sosventures.com/portfolio/). Disclaimer
  181. 181. 181 • HAX is a startup accelerator focused on hardware
 4 months program in Shenzhen
 Demo day in San Francisco. • Most active investor in hardware
 65 startups (B2B and B2C)
 Robotics, IoT, sensors, smart home… • Most experienced investor with crowdfunding
 26 campaigns
 $300,000 average raise • Pioneer of the “Lean Hardware” methodology
 TechCrunch series & presentations Apply to the next program:
 www.haxlr8r.com About HAX
  182. 182. HEX 3D printed drones HAX robotics startups (1/2) 182 Avidbots Cleaning robot Kast Ultra-fast 3D printer KATIA Low-cost robotic arm Makeblock Robotics kit Cell Robotics Modular robot #HAX #HAX
  183. 183. HAX robotics startups (2/2) 183 Rational Robotics Painting robot OpenTrons Low-cost lab robot Mousr Robotic cat toy Voltera Circuit board printer Winner of TechCrunch Hardware Battlefield#HAX #HAX
  184. 184. HAX IOT platforms 184 Spark WiFi + cloud for IoT STAK HW+SW stack for smart devices #HAX
  185. 185. Darma Sitting & ECG HAX health startups 185 BabyBe communication device for premature babies Quitbit Connected lighter Melon EEG sensor Vigo Attention monitor Clarity Portable air quality tracker #HAX
  186. 186. HAX smart home startups 186 Yeelink Connected lights Point House sitter Niwa Hydroponic system Fabule Emotional lamp Petcube Pet communication #HAX
  187. 187. HAX lifestyle startups (1/2) 187 Shot Stats Tennis Helios Cycling Syrmo Skateboard Roadie Automatic guitar tuner OTTO Hackable camera Prynt Smartphone printer $1.5M on Kickstarter #HAX
  188. 188. HAX lifestyle startups (2/2) 188 Vibease Connected vibrator Nomiku WiFi sous-vide device Palette Modular interface Everpurse Phone charging purse Linkitz Social modular bracelet #HAX
  189. 189. HAX startups portfolio 189 #HAX
  190. 190. 190 On Slideshare Software is from the Bay,
 Hardware is from Shenzhen (2013) Hardware: Harder, Better Faster Stronger (2014) 8 things about crowdfunding (2014) Hardware unicorns (2014) Why makers fail at retail (2014) HAX at Stanford Building lean hardware startups (2014) #HAX
  191. 191. 191 On Techcrunch From Prototype to Production (Nov 2013) Financing (Nov 2013) Why Makers Fail At Retail (Feb 2014) Investing in Hardware Startups (Apr 2014) 8 Things About Hardware Crowdfunding (Oct 2014) Breeding Hardware Unicorns (Nov 2014) #HAX
  192. 192. HARDWARE TRENDS 2015 v1.2 March 6, 2015 www.haxlr8r.com www.slideshare.com/haxlr8r

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