Hardware Acceleration Programs (HAPs). What are they, and why you should enter one.
What are HAPs?
Many entrepreneurs are unaware, or underestimate the scale and sheer variety of difficulties which can arise when trying to bring a piece of hardware to market. With quality issues, manufacturing approaches, testing, certification, hidden component sourcing dangers, customs regulations, the process can be a nightmare.
This is where Hardware Acceleration Programs (HAPs) step in. By managing and offering guidance of this process, HAPs aim to streamline the journey from prototype designs to functioning mass market products. In return for this service they may either charge one-time fee, take an equity stake, or charge a small percentage of the final FOB price once the product reaches shipment.
The recent trend of crowdfunding has seen a growing demand for such programs. Despite having ingenious concepts and receiving funding, many projects struggle to navigate the next stage - leading to long or indefinite delays, waste of funds, disappointing product quality, or a total failure to materialize. Examples here can be seen with The Robot Dragonfly project which still hasn't entered the market despite received funding nearly a year ago, and OpenVisla which failed to materialize, which one of the project founders explained they “underestimated the expense and difficulty of assembling the device.“
While failing to deliver on your campaign might seem like missing your opportunity, there's some more serious concerns. Take the example of Erik Chevalier's campaign for his board-game “The Doom That Came to Atlantic City”. Despite reaching his funding target, after several delays the project eventually collapsed. Angry backers have responded by chasing their money, demanding records of where the money was spent, and reporting him to various fraud and consumer protection authorities. Just to reiterate, this project was a board-game, not a complex, innovative piece of hardware...
So, you're probably wondering what HAPs can do to help you avoid a similar situation?
Why Should You Enter A HAP
These programs offer plenty of ways to incubate and accelerate your business through the hardware stage and beyond.
Funding. Startups can often struggle to raise funds, and while many of those looking to join these programs have already sourced capital, whether crowdsourced or from selling equity stakes, HAPs often have the ability to provide a cash injection themselves, or are linked with other sources of investment.
Technical Guidance. They link entrepreneurs to seasoned professionals who can provide guidance regarding technical aspects of the products. These mentors will have tried and tested experience with hardware innovation, design for manufacturing (DFM) and design for assembly (DFA). Having access to such know-how can help deliver a better product, while also reducing wasted funds.
Connections. Industry knowledge also comes hand in hand with having strong industry connections. HAPs use these connections to bring startups together with reliable factories which fit the needs of their specific product. To understand the difficulties of finding and managing a suitable factory check out our guide of 10 Things You Should Know About Manufacturing in China.
Certifications. This experience can also come in handy when applying for certifications. Many products need certifications regarding safety or environmental purposes. Creating a fully functioning product which fails to meet meet certification standards in your target market can be a dire waste of time and funds.
Quality Control. Equally as frustrating is quality management and testing to ensure that your product is reliable before it enters the market. Unlike developing software, you can't just make an edit and hit compile to check for bug fixes, nor can you release a simple upgrade to patch any issues once it's entered the market. Hardware can be much more difficult to develop. HAPs can facilitate this, not only through quality control at the factory, but also by using relevant and sizable test groups to provide feedback regarding functionality and reliability.
Shipping. Once you've developed a viable mass market product, your customers are going to want to ensure there are no customs and shipping issues. Your shipment needs to have all the necessary paperwork to leave it's country of origin, and to enter the destination country(ies). Problems with paperwork can result in fines, and lengthy delays which threaten future business from your customers.
Go-to-market Strategy. Finally, these HAPs have all the experience and know-how to help develop strong marketing and business strategies. They can advise on appropriate revenue models, help to identify customer bases and devise effective ways to target them. A good strategy is essential to maximize and sustain the value that can be achieved from a product.
What can we take from this?
Despite many entrepreneurs assumptions that there is little distance between prototype and final mass production item, the reality is much the opposite. Asian ODMs may have come a long way over the last decade, but receiving a product from them is not as a simple as sending your prototype designs and waiting for the delivery. If you don't have the experience and thorough knowledge required, a HAP could be the perfect solution to actualize your hardware dream and avoid disaster.
Have you had any experiences with failed projects as a backer or a founder? If so we'd love to hear what went wrong, and at what point you realized you were in trouble.
Alex Parr.