Everybody seems to agree that it’s never been easier to start a hardware company than it is today. After years of being eclipsed by software and services, hardware is sexy again. However, that doesn’t mean it’s any easier to be successful. Over the past few years I’ve mentored a number of startups and realised that their expectations often don’t match the reality of what they are. That doesn’t mean they can’t succeed, but it does mean that they’re probably wasting effort trying to be the wrong sort of company. There are lots of different models which can be successful, but a company is most likely to work if it knows where it is going and what it wants to be.
Hence this article. If you’re contemplating a hardware startup, or have already taken the first steps, you need to think seriously about what you want to be doing in five or ten years’ time and how you’re going to get there. It’s every bit as important as getting your product out. Recognising that gives you the best chance of achieving your goal and minimises the risk to your investors and employees – considerations which should be at the top of your priority list. It still won’t be easy, but if you can reduce some unnecessary pain by getting the right model, it will certainly be a lot less stressful.
What has the hacking of Ashley Madison got in common with smart homes? The answer is that both are likely to increase the number of divorces. If that seems a strange statement, talk to the wife or partner of anyone who’s got a smart home system (it’s generally the husband who buys and installs them). Most feel that it’s not improved their quality of life; it’s just added another level of frustration, because now they have a home which can go wrong.
Of course, that’s not the message the industry wants to get out. If you believe the analysts and the smart home manufacturers, your home is about to evolve from the thick bricks on the block to the Nobel Prize winning genius of housing. Technology is finally about to transform the place you live in into a high IQ domicile that reacts to your mood and presence, keeps you safe and saves you energy.
It’s a great story that plays to some excellent futuristic videos, from global technology giants like AT&T, through boutique technology leaders like Nest to the successful crowdfunded visions of Oomi, Nuimi, and Blaze Automation. In their vision, it’s slick, it’s sexy and it’s almost here.
Today Apple announced their purchase of Beats Electronics for a spectacular $3 billion. It’s left many industry analysts scratching their heads. Although a little shy of the original, anticipated $3.2 billion price tag, it’s surprising how close it is to the amount that Google paid to acquire Nest earlier in the year. So what’s behind the new $3 billion price point?
There are some interesting similarities in the two acquired companies. Both were started for similar reasons – their founders were exasperated with the quality of products which were currently on the market. In the case of Nest, Tony Fadell wanted to design thermostats and other household products which were intuitive and worked, whereas at Beats, Dr Dre was exasperated that expensive music players and smartphones shipped with low quality earbuds which cost less than $1 and failed to reproduce the music. (The Register has a nice opinion piece on whether they succeeded.) Both companies have produced high profile, high end products to address these deficiencies along with very high media profiles for themselves and their founders in industries which have historically had little branding.
How much does it cost to produce a wireless standard? And how long does it take? Surprisingly those aren’t questions that are asked very often – probably because most developers are happy to use what already exists rather than starting again from scratch.
In the UK, some members of the smart metering programme have begun asking these questions, potentially for the wrong reasons. They’ve realised that ZigBee – the current front-runner for the UK smart metering deployment, can’t provide the range to cope with every single house or block of flats, and have started wondering about whether it might make sense to start again from scratch.
A few years ago, when I was writing my book on the Essentials of Short Range Wireless I attempted to put some numbers to those questions. It seems an appropriate time to publish them, as the answers are a lot more and a lot longer than most people think.
There was a time when it was expected that most teenage boys would have a soldering iron. In those days we didn’t buy audio amplifiers or calculators, we built them from kits. And anyone who grew up in the late sixties in the UK will remember the adverts in Wireless World and Practical Wireless for a succession of kits from Sinclair Radionics. (The turbulent history of Sinclair and the resultant founding of ARM is very affectionately covered in a recent BBC drama – Micro Men.) Before he went on to greater things with the Spectrum personal computer and the C5, Clive Sinclair founded his empire with the promise of the most dazzling technology that we could have in the near future.
That bit about the near future was important. Whenever you ordered one of the early products from Sinclair, it never arrived by return of post. The reasons for delays are documented at the Planet Sinclair site and ranged from subcontractors making mirror images of the printed circuit board, through non-delivery of chips to products that were impossible to make. As a result, there was a common perception that Clive cashed our postal orders and cheques to provide the cash flow before he bought the kit parts. I suspect there was no truth in that rumour was true, but it taught us the principle that you had to wait for cool technical things to appear. But Sinclair invariably did a good job of keeping us early techies on-board, happily waiting the promise of things to come.
After a number of years in which we’ve come to expect the instant gratification that is available from the web, whatever our desires, I’m intrigued to see the re-emergence of that principle of having to wait. In particular, the tactics of small start-up companies similar to Sinclair Radionics, who tell everyone what they’re going to make well in advance of delivering it and then try to keep the customer interest level up until they actually deliver. I assume they’re not taking the upfront cash, as today we have Venture Capital to fund their development pains. But they’re playing to the same customer psychology that Sinclair did so well, of promising tastier jam tomorrow.