The Most Important Thing You Must Do as a Hardware Startup
You may think, or know, that your new hardware product is a sure thing everyone will love. You may have amazing survey results and friends begging to invest. Perhaps you even have sales representatives raving about your product and lining up to sell it -- plus wild successes at trade shows. But none of that really matters. Really, it doesn’t.
Because, to tell the truth, the odds are stacked against you: Most products fail once they get to market -- even those from established companies with big marketing departments.
The only votes that matter are those that come with cash. Anything else will likely lead you down the wrong path.
So, what you really need is a way to pre-sell your product, the earlier the better -- and here's where crowdfunding, email marketing and the online audience you've already built can save you. In fact, these strategies are by far the most important thing you can do to improve your chance of success.
In the best case your product will pre-sell like crazy. In the worst case, you'll sell nothing; and knowing this ahead of your official launch will save you thousands of dollars and years of your life spent developing a product no one wants.
Software and online product startups have an advantage here: They're more able to get a lean version of their product on the market quickly just to see if anyone really wants it. As a hardware startup, you have your work cut out: So, you need to copy the software/online product strategy whenever possible.
Crowdfunding on websites like Kickstarter is one method for raising money, but that’s not crowdfunding's most important feature. What’s really valuable is the market feedback you'll get because people will be voting for your product with real money.
In the past it has been difficult to test a new hardware product before it was fully developed and already in the process of being manufactured in volume. But crowdfunding has changed that because now you can sell your product before you have to fully develop it.
Sure, you may need a proof-of-concept prototype, but that type of prototype is much cheaper than a product developed to the point of readiness for mass production.
To have a successful crowdfunding campaign, you need to already have an online audience. You can’t just post your product on a crowdfunding website and expect any significant number of backers to pledge money. It simply does not work that way.
Trust me, I tried that several years ago. You need an audience, to jumpstart your campaign. To really get market validation, this audience can’t be your friends or family, either (in most cases your Facebook friends don’t make a valid audience). You need to begin creating a real audience now.
So, focus on collecting email addresses and not just social media followers (other than, perhaps, those from LinkedIn). There is just too much noise and competition on social media. Email gets you closer to having more of a one-on-one conversation with your followers. When it comes to online marketing, it’s a well-known fact that email marketing works much better than social media.
To be successful at collecting email addresses, you have to offer something useful in exchange. Create something of value for the demographic that you plan to market your product to. EBooks and lists are by far the most popular options. For example, as a tech product designer and consultant, I offer visitors to my website my free eBook How to Develop, Manufacture, and Sell Your New Tech Product.
Regardless of the product, make yourself an authority in your field and people will flock to your website. Begin from day one because it takes most people a year or more to build up a significant online audience. Then, once you have an audience, don’t forget about them while you continue to develop your product.
Keep them interested by sharing useful content, along with updates on your product’s development. If you’re there to help them now, they’ll be there to help you later. By the way, this is exactly what I’m doing too, if you haven’t figured that out yet. This strategy works great for both product and service companies.
Most entrepreneurs believe that they need to keep their product a secret until it's ready for mass production. This is the biggest mistake you can possibly make!
You can’t develop a successful product while living in a cave. You need market feedback from day one to be successful. So, begin building your audience as soon as possible.
Related: Get Your Product Figured Out First