Cyril Ebersweiler, venture partner at SOSventures and the founder of HAXLR8R, presentation from MakerCon Bay Area 2014

1. H
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STARTUPS
CYRIL EBERSWEILER
FOUNDER, @HAXLR8R
BUILDING
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n

2. Startup Accelerator for Hardware
From Prototype to Business
In Shenzhen & San Francisco

3. NAA (NOT ANOTHER
ACCELERATOR)
“OH NO, NOT another accelerator,
you may think. But this one is
different.”
#hax

4. LEAN HARDWARE PHILOSOPHY

5. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume

6. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate

7. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles

8. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles
4. Capital effective vs. Capital intensive

9. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles
4. Capital effective vs. Capital intensive
5. User backed vs. Venture backed

10. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles
4. Capital effective vs. Capital intensive
5. User backed vs. Venture backed
6. Sustainable vs. Growth at a loss

11. LEAN HARDWARE PHILOSOPHY
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles
4. Capital effective vs. Capital intensive
5. User backed vs. Venture backed
6. Sustainable vs. Growth at a loss

12. YESTERDAY @ HAX
2 robot-as-a-service
2 sports tech
2 health tech
1 green tech
1 3d printer
1 connected camera
1 smart city logistics

13. KICKSTARTER LAUNCHES
Quitbit / Shot Stats / Niwa / Syrmo
www.kickstarter.com/haxlr8r

15. POSITIONING prototyping
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DISTRIBUTION

16. POSITIONING

17. BEWARE
OF THOSE
“WARES”
wow
so future
very hardware
such excite

18. TWELVE “WARES” TO AVOID
1. FUNware No business

19. TWELVE “WARES” TO AVOID
1. FUNware No business
Kenji Kawakami
Chidogu pioneer
(with tissue roll headgear
+ Fail-proof eyedrop glasses)

20. MORE CHINDOGU
Baby mop
Open eyes stickers

21. TWELVE “WARES” TO AVOID
1. FUNware No business
(includes NICHEware and ARTware)

22. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible

23. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
“Two sensors
and an app”
Nobel-grade
research

24. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
PRESSY ($27)
Funded Oct 2013
Raised $695,000

25. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
Speed Button ($10)
(“kuai anniu”)
Funded Jan 2014
Raised $34k

26. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
Xiaomi MiKey
($0.8)
Launched April 2014
“If Xiaomi starts producing
buttons like Pressy,
we will start to produce
smartphones.”

27. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning

28. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
“Built a better mousetrap and the
world
will beat a path to your door”
Ralph Waldo Emerson
(maybe)

29. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
The problem with
mousetraps
• 4,400 patents
• 400 applicants per year
• “most frequently invented
device in U.S. history”

30. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
“When you have a hammer, everything looks
like a nail”

31. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made

32. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made

33. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec

34. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing

35. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors

36. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins

37. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it

38. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it
11. FUTUREware No market before years

39. TWELVE “WARES” TO AVOID
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it
11. FUTUREware No market before years
12. LOCALware Too tied to a local ecosystem

40. NOT JUST HARDWARE
• Pure hardware can be copied
• Combine Hardware & Software
• Community (GoPro, Makerbot,
Glass…)

41. F
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42. TIMEFRAME
$
PROTOTYPING PRODUCTION SCALING
3 months ~ 2
years
3 months ~ 2
years
1+ year TIME

43. TIMEFRAME
$
PROTOTYPING PRODUCTION SCALING
ARE YOU REALISTIC? SOME THINGS TAKE
TIME
3 months ~ 2
years
3 months ~ 2
years
1+ year TIME

44. TIMEFRAME
$
PROTOTYPING PRODUCTION SCALING
ARE YOU REALISTIC? SOME THINGS TAKE
TIME
ARE YOU TOO SLOW? MAYBE YOU NEED
HELP
3 months ~ 2
years
3 months ~ 2
years
1+ year TIME

45. THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
Founders
Friends
Family
Fools
TIME

46. THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
Accelerators
Angels
Founders
Friends
Family
Fools
TIME

47. THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
Founders
Friends
Family
Fools
Crowdfunding
Accelerators
Angels
Pre-orders
TIME

48. THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
Founders
Friends
Family
Fools
Crowdfunding
Accelerators
Angels
RETAIL
CHASM
Pre-orders
TIME

49. THE RETAIL CHASM
PROTOTYPING PRODUCTION SCALING
$
Founders
Friends
Family
Fools
Crowdfunding
Accelerators
Angels
Sales
Factoring
Banks
RETAIL
CHASM
Pre-orders VCs
TIME

50. SAVE YOUR CASH FLOW!
Pre-sales (best!)
Credit from supplier (it’s like a bank
loan!)
Factoring (purchase order financing)
Bank credit lines
Revenue-based financing
VC (most expensive money!)

51. DISTRIBUTION

52. SCALING STEP BY STEP
$
TIME
Direct

53. SCALING STEP BY STEP
$
TIME
Online
retailers
Direct

54. SCALING STEP BY STEP
$
TIME
Specialty
stores
Online
retailers
Direct

55. SCALING STEP BY STEP
$
TIME
Big box
retailers
Specialty
stores
Online
retailers
Direct

56. SCALING STEP BY STEP
$
TIME
Big box
retailers
Specialty
stores
Online
retailers
Direct

57. LEAN RETAIL RULES
Keep demand higher than
distribution
Your customers are your best
investors
Retail is not a sprint. Learn at
each step
Cash flow is king

58. LEAN HARDWARE PHILOSOPHY
1. Validate problem
2. Partner with factories
3. Fast to market
4. Capital effective
5. User backed
6. Sustainable

59. LEAN HARDWARE PHILOSOPHY
1. Validate problem
2. Partner with factories
3. Fast to market
4. Capital effective
5. User backed
6. Sustainable
HAX philosophy
Meaningful products
Aligned with founders

60. A
P
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N
O
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@HAXLR8R
WWW.HAXLR8R.COM
THANKS!
www.slideshare.com/haxl
r8r