Subscribe to Entrepreneur for $5
Subscribe

3 Tips for Scaling a Hardware Company Successfully

Scale your hardware startup with savvy, and you'll come out ahead.

By
Opinions expressed by Entrepreneur contributors are their own.

Nowadays, software startups are all the rage. Most entrepreneurs focus on software because of the low barrier of entry, often requiring only coding knowledge. Depending on what kind of software you're building, you might even be able to do it by yourself or with a small team.

Developing hardware, on the other hand, is much more intensive, requiring more time and effort to get a quality product to market. It's also likely to cost more. Still, savvy entrepreneurs know that hardware startups offer certain advantages. For instance, that higher barrier to entry means the market is much less competitive, so a company is likely going to be able to keep its market share for longer. Also, customers are typically more loyal, if for no other reason than the complicated nature of changing their hardware devices, preventing them from easily moving on.

Those reasons and others are why hardware companies like Oculus and Boston Dynamics continue to dominate their respective fields. For entrepreneurs looking to build and scale hardware startups to similar levels, here are some of the most important things to consider.

Related: The 10 Costs You'll Pay to Bring Your Hardware Product to Market

Work with the right manufacturers

For most startups, unless you're a company like Tesla with billions in funding, it's necessary to select a manufacturing partner whose job is to convert your team's designs into the actual products in their factories, as it's simply not sensible, in most cases, to set up a full assembly line for a product's first run. The choice of a manufacturer to work with can make or break a product, and thus make or break the startup.

The first thing you'll need to consider is how competent a manufacturer is. Many manufacturing companies advertise their willingness to create private-label products, but it's important to check that the company has experience working on the types of products you're intending to have them manufacture. Integrity is another crucial issue, as outsourcing manufacturing will necessarily require the sharing of patents, designs, and other intellectual properties that are essential to your company's success. It's important to check through a manufacturer's history to be certain that they have a spotless track record in that regard. It's also important to make sure you have watertight legal agreements to protect your company.

Related: 5 Reasons to Get Excited About Smart Manufacturing

Build your community

One of the reasons why crowdfunding platforms like Kickstarter and Indiegogo have had so much success among the startups founded through them is that they make it very easy to build a community around a new product, even before it's fully launched. This ensures that there is a ready market for a potential product, and also that its customer base would be willing to share their experiences, thus influencing more people to buy the product.

Even if you're not using a crowdfunding platform, it's important to invest the time and resources into building a community for your product by using a range of social media platforms. There are a variety of ways to do this, but the ideal strategy would be to combine viral content marketing with influencer partnerships to ensure your product is getting seen by the people who are already predisposed to becoming your customers.

Related: 12 Key Strategies to a Successful Crowdfunding Campaign

Rigorous quality control

Customers don't like delays, but what they dislike most are products that simply do not work—or worse, that cause damage. A good example of the latter is the case of the Samsung Galaxy Note 7 phone series that routinely burst into flames for no apparent reason. Those phones were shown to have caused bodily harm and were even banned from flights, causing all Samsung phone sales to plummet during that period.

A giant like Samsung might survive that, but it is highly unlikely that a startup would, which is why it's crucial to put very strong quality control measures in place to ensure that your products work as they are touted to, before being sent to customers. There should also be a dedicated customer service system in place, for resolving any issues that arise once a product is sold, and for making sure that customers remain happy and willing to leave positive reviews.

While it's clear that hardware startups take hard work, they also offer immense benefits to those entrepreneurs who can push through the initial hurdles. By making sure that a community exists around your business in anticipation of your product launch, you will have customers eagerly looking to buy, test, and give feedback on your products—And, as long as your products are solving the problem they were designed to solve, and are kept to a high standard of quality, scaling successfully will be inevitable.

Entrepreneur Editors' Picks