Hardware is a cash flow business. It takes money to get to market, and even more money to scale your company. This means that your funding strategy is second in priority only to creating an amazing product.
I got the funding strategy wrong at Contour.
Despite being a $30 million business with award-winning growth (#7 on the Inc500, we couldn’t properly fund the business. Being number two in a fast-growing category wasn’t enough as every investor wanted to lead the market, not follow it. In the end Contour ran out of money, which is still mind blowing when you consider that the company had hundreds of thousands of customers.
Contour losing the category wasn’t a result of the decisions made at the end. In reality Contour lost almost two years before when our competitor raised $80M to our $5M. It was at that point that we should have stepped back and re-thought our strategy, but instead we plowed forward and assumed number two could get just as much funding. We couldn’t.
A lack of proper funding prevented us from fulfilling customer demand, growing brand awareness, and staying in front of the innovation curve. Our lead in product quickly deteriorated as a lack of cash prevented us from moving the business forward.
We are thrilled to publish the ultimate series of articles for makers (or anyone) looking to get in to hardware – How To Build A Hardware Startup – A complete guide from idea to market fit by Marc Barros.
Know Your Why
Have A Purpose
Picking Your Co-Founders
Finding The Right Market
Minimal Viable Product
Pricing Your Product
Creating Your Brand
Picking A Brand Name
Picking The Right Supplier
Deciding to Crowdfund
Life After Crowdfunding
Building Retail Distribution
The Cost of Retail
Building Brand Awareness
Poor Quality Will Kill You
Hardware Startup Metrics
We’ll have Marc on an upcoming hangout, post up any follow up questions/comments here and on Google+
Join us every Wednesday night at 8pm ET for Ask an Engineer!
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