5 Tips for Indian Hardware Entrepreneurs
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.Entrepreneurship is difficult in any setting/country, but, making Hardware products in India is not for faint of heart. There have been companies (like Su-Kam or Ahuja Electronics) who have made remarkable hardware products in India and scaled, however, either the problem that they were trying to solve was specific to India (power cuts are not common in the US or Europe) or there was a cost arbitrage.
There may be a few stories like Teewe, Thinvent, Watchy going around, however, there are no Ola, Flipkart kinds of poster boy successes in developing hardware products in India. There are loads of odds stacked against the hardware startups in India - We can note a few and added ways around as well:
1. Hardware Talent:
To make a hardware, you need five different kinds of skill sets - Electronics Design, Embedded/Application programming, Mechanical Engineers, Industrial Design and Packaging design. Embedded/Application is a no-brainer, we have so many software Engineers available they may be able to do the same. It may be easier to find packaging designers as that’s something that has been happening in India. The challenge is to find the other four skills (fellas who can design PCBs or people who can create accurate form factor in solid works and Mech Engineers who can give definitive science to the art of Industrial designers).
Solution: I have found the Diploma/Engineering combination of Electronics Engineers as good fellas to take over the Electronics Design aspects and even Embedded Software Design. Even the graphic designers can be taught packaging design. The real problem is finding solid Mechanical Engineers (I still do not have an answer there) - hire a fresher and spend time with him/her on this skill.
2. Lack of Tool Rooms:
In order to build your form factor in a scalable manner, you will have to invest in dies and moulds. The biggest issue stopping the hardware rise in India is due to non-existent tool rooms. These are places where you will go for getting your dies made once you have decided on the form factor. These folks have not updated their skill sets since last 20 years or so - and we can see a lot of hardware startups die here. They are good at copying samples, but, nothing original ever comes to them. Professionalism is also a big issue here - many startups have died due to the over-commitment of die makers.
Solution: 3D Printing technology can be used to come up with samples and treat the die makers the way you will treat your spouse on his/her birthday - it’s just that you will have to treat them like that everyday ;). You can also search for commission agents of Taiwanese or Chinese Tool Rooms who have set up shops in India.
3. Vendor Ecosystem:
The first thing that Maruti did when they entered India was developing a vendor eco-system. Money was paid and technology transferred to develop vendors that could supply the parts. This was the most difficult thing for Maruti - imagine doing the same as a startup :(
Solution: Since you are not Maruti and you do not have time. You will have to put your charm to the application over here - be nice and polite and show them the dream. The folks who believe in you will work with you. Pay on time every time and organize things like Vendor Felicitation ceremonies and before you know it will all work out.
People will say sales channels are a challenge, however, I differ for the right price point and positioning, India has a market for everything. It’s the scalability which is difficult to achieve.
Solution: Look long-term while building capacity. We were selling some 300 boxes per month till last year and are already at 1500 boxes per month this year. My next step in capacity building is to get to a level of 10,000 boxes per month (knowing very well that my demand is going to be around 3000 boxes per month next year), but, I have to build to scale.
5. Competitive Threats:
Can come in either from cheap Chinese imitations or Awesome US/Europe Innovations. So just producing the hardware is not enough if you want to win in the long run.
Solution: Think about building a strong ecosystem around your product where there's either a phone app that interacts with the hardware or some inbuilt app that can be regularly updated. Further, creating an ecosystem around your product (a sort of user group that works on your product will help a lot). For instance, we have created IRC League - and it turns out they are a huge driver in our growth.
Hope this sheet helps!