Lessons learned from 200+ investments in hardware startups. Talk given at ATOMS in Paris in November 2017.

1. The
Hardware Code

2. Program-Based Hardware Fund
Pre-seed — $100k + Program
Seed/A — Follow-on

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HAX | HARDWARE TRENDS 2017 | PAGE 3
$300M
ASSETS UNDER
MANAGEMENT
600+
STARTUP
INVESTMENTS
№1 EARLY STAGE INVESTOR (2017)

4. THEBIGFOUR
>150STARTUPS/YEAR

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576.65
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HAX | HARDWARE TRENDS 2017 | PAGE 5
HARDTECH
VERTICALPROGRAMS
MILESTONE-BASEDINVESTMENT
№1 EARLY STAGE INVESTOR (2017)
(NEXTFUND:1Q’18)

6. AI, energy, &
life sciences are
promising fields
where you can
make a huge impact.
It's what I would do
if starting out today.

7. STARTUPS238
YEARS5
RAISED$430M
KICKSTARTERS111
BACKERS$50M

8. INDUSTRIAL
CONSUMER
HEALTH
ENTERPRISE
10
20
30
40
2012 2013 2014 2015 2016 2017
B2BISGROWING

9. Richard
Branson,
CO-INVESTORSSAMPLE

10. Most Startups Fail

12. Why Hardware Startups Fail
1. Lack of consumer demand
2. High burn rate
3. Lack of interest after initial crowdfund
4. Product strategy mistakes

13. Why
Why
Why
Why
Why

14. Why startups fail
Lack of demand
High burn rate

15. Why startups fail
Lack of demand
High burn rate
Positioning Price
Cash flow
Development
Sales
Visibility

16. Customer
discovery
Distribution
terms
Factory
terms
Marketing
PR
Distribution Prototyping
Manufacturing
R&D Team
Why startups fail
Lack of demand
High burn rate
Positioning Price
Cash flow
Development
Sales
Visibility

17. Customer
discovery
Distribution
terms
Factory
terms
Marketing
PR
Distribution Prototyping
Manufacturing
R&D Team
Why startups fail
Lack of demand
High burn rate
Positioning Price
Cash flow
Development
Sales
Visibility
10x Advantage
Science
Software
Experience
Nice to have
Must have
B2B
B2C
Features
Science Fiction

18. Why startups fail
Lack of demand
High burn rate
Positioning
Customer
discovery
10x Advantage
Science
Software
Experience
Price
Distribution
terms
Factory
terms
Cash flow
Nice to have
Must have
B2B
B2C
Features
Science Fiction
Marketing
PR
Distribution
Visibility
Prototyping
Manufacturing
Development
R&D Team
Sales

19. HAX Startups

20. Results

21. Trajectory

22. Milestones
• Lab prototype
• Work/Look-like
• DFM
• Product
• $1M, $3M, $5M, $10M…
• Profitable

23. Learning Curves

24. Learning Curves
• Positioning
• Prototyping
• Manufacturing
• PR & Marketing
• Sales & Retail
• Financing
• Product, Team & Self-Management

25. SEED4 MONTHS
GROWTH6 WEEKS
O TO 1 1 TO N
SHENZHEN
PrototypetoLaunch
SANFRANCISCO
ProducttoScale

26. Learning Curves
• Positioning (HAX SZ)
• Prototyping (HAX SZ)
• Manufacturing (HAX SZ)
• PR & Marketing (HAX SZ + HAX SF)
• Sales & Retail (HAX SF)
• Financing (Coming soon!)
• Product, Team & Self-Management

27. 4 Groups

28. 4 Groups
• Failed
• Ventures
• Bootstrapped
• Recoveries

29. Failed

30. Failed
• Too niche (early programs)
• Founders split (1 in 20)
• Gave up early (< 2y)
• Too slow

31. Ventures

32. MAKEBLOCK

33. FLOWNEUROSCIENCE—DEPRESSIONTREATMENT

34. POINT—FRIENDLYHOMESECURITY

35. AVIDBOTS—COMMERCIALCLEANING

36. Canada

37. NURA—HEADPHONESTUNEDTOYOU

38. low tones mid tones high tones
sensitivity

40. France
OCTOPUS

41. 1 2 3 4
18MONTHSFROMCONCEPTTOMARKET

42. R&D1
2
5
4
3
Prototyping
Production
Investment
World-ClassSTARTUPS
World-ClassRESOURCES
Sales

43. R&D1
2
5
4
3
Prototyping
Production
Investment
World-ClassSTARTUPS
World-ClassRESOURCES
Sales

45. Bootstrap

46. TRAINERBOT

47. VOLTERA

48. PINPRESS

49. ORENDA—HOMEBARISTA

50. WAZER—WATERJETCUTTER

51. IN 3 MONTHS…
from “Does it work?” to… “How much?”

52. Recoveries

53. Pre-HAX

54. PARTICLE—IOTCONNECTIVITY&CLOUDSOLUTION

55. U.S.A.
SIMBEROBOTICS—SUPERMARKETINVENTORY

56. Crowdfunding

57. BARTESIAN—COCKTAILMACHINE

58. PETRONICS—SMARTCATTOY

59. Product 2

60. NTC—HACKABLECAMERA

61. CHIP—$9COMPUTER

62. VUE—SMARTACCESSORIES

63. Health

64. LIEFTHERAPEUTICS—ANTI-STRESSPATCH

65. Customer Pivot

66. OPENTRONS—LABROBOT

67. Conclusion

68. Best practices
• It’s all SKILLS
• It does ONE job
• It targets a NEED
• Your factory is your PARTNER, you BANK, your INVESTOR
• It’s a NEW DISH
• It’s a STORY
• It must SELL
• It takes YEARS

69. THANKS!
ben@hax.co