Notice to smart hardware makers: The road conditions ahead are complicated, please travel with caution

Data from a certain technology media showed that as of September this year, a total of 106 financing transactions were completed in the smart hardware field in 2015, of which 14 were after the B round, accounting for about 13%.

A senior entrepreneur predicts that by the end of 2015, 80% of hardware startups will die in the A round.

The winter of 2015 was particularly cold for the smart hardware industry.

But this does not affect the bustle of Zhongguancun and the prosperity of Huaqiangbei. In Beijing, incubator-themed activities are held one after another under the care of relevant departments; it is said that in Shenzhen, a legendary city for the hardware industry, a new product will come out when you walk from one end of the market to the other.

Although capital is cold, the market size of hundreds of billions is still expected. According to what was said at the presentation, support from policies, technology, capital, channels, media, etc. is ready. Wealth and passion still drive young people with dreams to continue to invest in the smart hardware industry.

But this journey may be much more difficult than imagined.

Does it really only take minutes to go from 0 to 1 to produce a product?

The service provider said: "We have built an efficient B2B online platform that integrates 10 customized service modules. Through this platform, developers can complete the rapid development of product prototypes in a very short time."

The technology provider said: "We can provide various capabilities including face recognition, image recognition, voice recognition, etc. in the cloud to make up for your shortcomings and quickly add the technology you need to the device, so that the device has a better human-computer interaction experience."

The role of the incubator sounds even more powerful: "We can provide a variety of support from chips and solutions to flexible industrial chains and industrial design." It is said that with the support of the incubator, Shenzhen's makers can turn an idea into a good demo within 15 days.

It must be admitted that the emergence of these third-party service platforms has provided great convenience for hardware makers and provided a possibility for hardware dreams that originally lacked growth opportunities to become reality.

But is it really that simple to go from 0 to 1? According to Shenzhen smart hardware entrepreneur Duan Zeyi, if the so-called demo refers to the first version, the fastest production time is only one day. The first version is the appearance model of the product, which is actually just a product shell made by 3D printing or polishing. Its purpose is to see the appearance of the product in the early stage, and it has no actual function.

According to this statement, from idea to first version, the product has only completed a small step from 0 to 0.1, and is still far from being truly formed.

From 0.1 to 1: The threshold for hardware entrepreneurship is not just about technology

Indeed, with the support of the above forces, the environment for hardware startups is no longer the same as it was two years ago. Especially after the participation of technology giants such as Intel and JD.com, who have accumulated profound experience in technology, capital, and supply chain, makers have gradually begun to get rid of their isolated and helpless situation.

Even so, the entry threshold for smart hardware is still much higher than that of traditional Internet or O2O projects.

On the technical level, hardware projects need to involve at least several completely different fields, such as industrial design, hardware development, software development, and cloud connectivity. Tong Weiliang, GM of Wutongshu Capital, who has experience in Internet entrepreneurship, has observed that smart hardware projects have extremely high requirements for the team, and the software team's product plus technology model is completely insufficient. From industrial design, supply chain, software, hardware to marketing, any weakness in any link may directly lead to the bankruptcy of the project.

According to an analysis by a senior person in the hardware sales field in Shenzhen, only considering design without considering sales, and lack of brand and sales channels are the reasons for the high mortality rate of current smart hardware startup projects.

After the product prototype is out, the next step is to optimize cloud connectivity, optimize industrial design, reduce costs, and prepare for mass production. In these links, for many inexperienced startups, using third-party platforms may be a more reliable choice.

From 0.1 to 1, in the eyes of investors, this is not only a product breakthrough, but also the transformation of the smart hardware team from makers to entrepreneurs.

From 1 to n, there is still a long way to go

Many projects died at the mass production stage. Liu Zihao, general manager of JD.com's smart ecosystem business department, gave an example: some projects invested 2 million yuan to complete early research and development, and thought they could enter the mass production stage. Only then did they find that it cost 300,000 yuan to make a mold, and even 10 million yuan for mass production.

Insufficient budget is one of the reasons for the failure of this link. In addition, lack of supply chain resources may also lead to the same situation.

The role of the third-party platform can be well reflected at this time.

It is reported that there are many incubators on the market, some of which are run by large technology companies in the industry, some by hardware-related supply chain and media companies, and some by other private capital that has nothing to do with the bank. The services that these incubators can provide are also different.

In comparison, the services that large incubators can provide are relatively fair and formal. Entrepreneurs especially need to avoid those institutions that set up incubators just for business opportunities. Not only will the related fees be relatively high, but the support they can provide may also be very limited.

Taking JD.com as an example, Liu Zihao introduced that JD+ incubator is different from traditional incubators, which are more like institutions that connect with the latter. JD+ incubator can help projects graduated from traditional incubators solve many problems encountered in the process from 1 to N, such as industrial design, supply chain, product positioning, marketing, etc.

The services provided by such third-party institutions with backgrounds of Internet giants are not only more comprehensive but also more in-depth.

JD+ is building a brand for entrepreneurs, providing a collection of services covering capital, incubation, industrial design, supply chain, marketing and technology. In-depth exploration is carried out in each aspect. "Take the supply chain as an example. We will help startups without supply chain experts from formulating mass production plans to signing contracts." Liu Zihao said.

The road to smart hardware is long and arduous, and choosing a suitable partner is crucial.

The final touchstone: the market

From mass production to market, this is the last hurdle for the product and also a hurdle of life and death.

Products that do not meet market demand are fundamentally failures. If you fail to realize this, the further you go, the greater the loss. If sales of products fail to meet expectations after mass production, it will directly affect the company's cash flow, which is precisely the lifeblood of a company.

"A truly good enterprise must be built by the market," Duan Zeyi stressed. Indeed, capital can start a project, and platforms can accelerate a project, but it is the market that ultimately determines the success or failure of a project.

Behind the market are actually consumers. When there are enough consumers willing to pay for the agreed demand, the market is formed. Many products fail because they do not meet such "demand".

This point has been elaborated in detail in the article "Capital is cooling down, it's time to tear off the veil of pseudo-intelligence."

From idea to demo, then from demo to mass production, and finally back to product definition. The life cycle of smart hardware may face many unexpected challenges. If you want to make a breakthrough here, you should be cautious when entering the market unless you have the determination to move forward. After all, in the long run, a project will not go far if it relies solely on concept support.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.