13 Apr Three Challenges the Hardware Industry Faces in 2016
2016 is the year many thought leaders in tech space are urging caution, expecting markets to cool drastically and urging startups to stay afloat by minimizing burn rate. Yet at the same time, the hardware industry is the fastest growing sector in the market, with investment up 30x since 2010.
At this important precipice, what does the future hold for hardware companies?
To better understand where the hardware industry opportunities are, what are perceived as the greatest challenges, and what it means to be a hardware founder today, we surveyed over 200 hardware companies and uncovered a lot of interesting information. Here are the highlights.
Hardware Companies are Working to Build Products Faster
In our report, we found on average most companies budget one to three months to build a functional prototype. Similarly, the majority of companies budget just three to six months to go from functional prototype to production.
If you’re not familiar with hardware development lifecycles, just know that this kind of schedule is incredibly fast (and ambitious) compared with what was possible just five years ago. Hardware startups are increasingly seeking to become leaner in order to get to market faster and maximize capital investment.
But while companies are working hard to be lean and build faster, the outcomes don’t always match expectations. that about four out of five VC-backed crowdfunding projects were late in 2014, and of the late projects (total cohort of 91 companies), 30 percent still hadn’t shipped in Q1 2015.
Hardware companies setting ambitious schedules to get to market faster, and that’s fantastic and important, but there are clearly still obstacles in the way preventing companies from building as fast as they’d like to.