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Aleksander Tõnnisson — Entry Barriers to Hardware Startups

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Lowered entry barriers make it appealing for engineers without hardware background to start up. What does it take to build a successful hardware startup and why many products never make it to the manufacturing.

Aleksander Tõnnisson:
Co-founder, CEO at Buildit

Published in: Technology
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Aleksander Tõnnisson — Entry Barriers to Hardware Startups

  1. 1. ENTRY BARRIERS FOR 
 HARDWARE STARTUPS Aleksander Tõnnisson
  2. 2. D2D sales corporate R&D founder & CEO mentor / speaker / moderator investor in 20+ HW StartUps ABOUT ME
  3. 3. http://blog.upverter.com/
  4. 4. The Hardware Revolution hardware components commoditized and cheaper improved software and connectivity systems easier prototyping and manufacturing smartphones and tablets widespread kickstarter de-risks the product launch INTERNET OF THINGS
  5. 5. 10.000
  6. 6. 374 489 033 381
  7. 7. MVP & FAST ITERATIONS Software as a Service sketching MVP iterating scaling -2 launch http://www.alesspetic.si/
  8. 8. NO ITERANTIONS POSSIBLE Hardware sketching prototyping manufacturing scaling -12 launch production http://www.alesspetic.si/ -6
  9. 9. founders  fit   market  timing   sourcing   prototyping   design  to     manufacture   tooling   assembly   financing   fundraising   branding   marketing   GREAT  IDEA MVP FABRICATION REVENUE software   firmware   BOM   GERBER   certifications   regulations   logistics   china  effect   payment   customer  service   distribution   PR   http://www.haxlr8r.com/ Typical Startup Lifecycle HARDWARE STARTUP
  10. 10. founders  fit   market  timing   prototyping   financing   fundraising   branding   marketing   GREAT  IDEA MVP FABRICATION REVENUE software   certifications   regulations   payment   customer  service   PR   http://www.haxlr8r.com/ Typical Startup Lifecycle SOFTWARE STARTUP
  11. 11. GETTING STEEP VERY QUICKLY Phases of Hardware Startup CP DFM retail -12 launch MFP 3PL FFR
  12. 12. WHERE THE MONEY GOES Software Startups Cost Structure 60% 10% 30% R&D Logistics Margin
  13. 13. WHY IS CASH IMPORTANT Hardware is a cash flow business 60% 10% 30% Logistics 20% R&D 10% Margin 25% 10% BOM Retail 25% Wholesale
  14. 14. MVP DFM SCALING how much < 100K < 500K >1M for what components design costs moulds test benches marketing   working capital from where FFF   savings pre-orders angel & seed venture capital bank loan WHY IS CASH IMPORTANT Hardware is a cash flow business
  15. 15. NEAR EAST VS MEXICO Manufacutring Wages 05 15
  16. 16. SOFT  LTD 1MM  users,  4%  conversion  @  $10/year     $400K  /  YEAR   HARD  LTD 1 500 000 1 000 000 500 000 250 000 12.000  units/year,  @  $100,  30%  margin $400K  IN  MARGIN 2 500 1 500 2 000 6 000 http://www.alesspetic.si/ Which is better? USER BASE vs PAYING CUSTOMERS
  17. 17. Aleksander Tõnnisson, CEO, Founder
 aleksander@buildit.ee 
 APPLY AT WWW.BUILDIT.EE 


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