Hardware Startup

“I don't know the actual numbers, but I was trying to estimate it over the weekend. So I think we'd get, you know, maybe five percent of the deals from top founders would come in, would be harder before. Now it's the north of 20% or 30% right now.”

“The first one is the labs are so desperate that they will engage with startups. And so, like, we actually have quite a bit of signal early on because they're, you know, the labs are, Inking deals with companies before they actually have hardware available. And…”

“If you're a thirty-person hardware startup, like, the CEO better be coding, right, so.”

“And so I think as an investor and someone who's really excited about companies that can counterfactually impact the world, that can make the world look physically different in some meaningful way, the number of opportunities now in hardware are far greater tha…”

“Try as much as possible to find off the shelf things that you can build and test with. I wouldn't recommend building your own hardware until you can test your market. And make sure that you're actually solving a problem that is, you know, someone will actually…”

“I watch people invest in them, and I'm like, wow, like, you just have a deep underappreciation for just, like, how long this company has until gross margin flips to, like, positive, how long it's going to be until they're actually, you know, sort of ready to, …”

“Once you land your value proposition, any customer buy into it your stickiness is also way more exponential.”

“To play in hardware, you either have to be the most disciplined startup entrepreneur of all time, and probably somebody who's done it multiple times, and is willing to go through it again, right? And to be extremely capital efficient in the world of atoms, whi…”

“The hardware stuff that does work as a startup tends to have an enterprise use case of some kind that enables it to, you know, really have a business model straight out of the gate. And those tend to be, you know, in the case of zip line, it was healthcare and…”

“I think for most people they should be 90% Tim Cook, if I'm honest, because survival is the name of the game for hardware. Only when you survive and you pick up in volumes, you pick up in When you pick up the volumes, you can get stronger engineering teams, yo…”

“What I'm really against though is like what I call, and I say this with respect for actually like teen engineering, but like I'll call it like artistic entrepreneurship where there's no prayer that these devices work. There is, it's fun to invest in.”

“They are justified 98% of the times.”

“And so, okay, what is your gross margin, which comes after the bomb and the cogs, right? And what is included? And after that, that needs to be Really be above 50%. Yeah. And probably the best is 55, 60.”

“So a lot of companies, they will tell you, oh, okay, I don't know, my gross margin is 30% and then I spend 40% because then I have a subscription and in 12 months I get the payback. That most of the times doesn't work. And the reason is, substantially, you nee…”

“We do a lot of hardware, and I don't know why, it always seems to take seven million dollars to get to a commercial product.”

“Building hardware requires having a lot more conviction early on, you know, before you even build your view one. If you're wrong in software, you take feedback and iterate quickly and move on, you know, in a matter of days sometimes. If you're wrong in hardwar…”

“Hardware is hard. So if I have the choice between investing in a hardware company, a software company, I'm sort of just leaning towards software, unless there's a real outlier.”

“I think best practices, if anyone here is doing a hardware startup think best practices. Is you don't do it at the earliest stages and you do it later when you have like V two V three and you're ready to manufacture at scale.”

“In hardware, you've got a lot of pain up front. It might take you a year to get out the product. The product has to be perfect before you get it out the door, because once you get out the door, you can't get it back, and it takes a lot of capital to get going.…”

“It was a really good thing that we were making them one by one, or else we could have potentially made, like, hundreds with that same problem right at the beginning and had lost, you know, basically everything.”

“You're looking at 18 months, probably minimum from start. That's like from prototype to mass pro or mass production, 12 months, maybe if you're great at it and you know exactly what you're doing.”

“The number one mistake I see with presales is discounting. The number one mistake is that basically, especially hardware founders will misunderstand how much they need to charge so they don't lose money, and so their pre-sale becomes their death.”

“And we started to talk to some other people and really found out that, you know, no one was interested in funding hardware startups. And so we asked around, we said, well, why? And they said, well, it takes too long and it's too expensive.”

“Today, any 500 dollar computer can run incredibly sophisticated CAD. And on top of that, the software is Free. And then you kind of add in rapid prototyping like three D printing, and you're kind of timing for your first unit, plus things like Arduino, make it…”

“You almost have to grow one stage ahead of where the business is.”

“And so the big, Problem with hardware being quote unquote hard is, is not the inherent nature of hardware. It's the fact that most people that are in the startup community have never done it before. And so they don't know what to look for when they're trying t…”

“Whenever I talk to people starting these things who are so focused only on the product And getting it out the door, and you know, whatever it's going to be named, that they forget that in order to build something, you need to communicate your values, and it ne…”

“I don't think we think of it in terms of crowdfunding. I often think of crowdfunding as a bit of advertising. I mean, it's great to have that money, but chances are they probably raised around a seed round before that. So it's more about validating the custome…”

“I find as I'm an investor, a seed investor in a lot of these and talking to later stage investors, Their hurdle is shipping. If you haven't shipped your product and you can't talk about metric and how customers are engaging with your product, you're, they don'…”

“One of the things about when you're building, say, raising money for hardware on Kickstarter, for example, is that You can raise money so easily for if you lay out a compelling product vision that it actually takes away some of the constraints that would force…”

“It was a no-no or no-go or no investment zone for the other VCs.”

“Historically, getting hardware companies funded was very difficult, and this allows companies to essentially prove their concept with an initial audience, which is really key.”