Author: Sean Flood, Co-Founder of Today & Managing Member of EFO Ventures Investment Fund
Ok, let’s get it out up front, Hardware is Hard!
Anyone raising money who happens to have the hair-brained idea of building a mobility hardware product that could be used by the masses and dare we say, improve how we interact with our communities, ever hear this from an investor?
I get the benefit of being both an active investor and operational entrepreneur in the mobility sector for the past 10+ years and I believe hardware, when done right, is the center point of the mobility industry.
Building any company is Hard!
There are historically two types of investors, ones who only invest in “high growth SaaS/Tech businesses and ones who understand and invest into hardware focused companies.” Both are fine and free to follow their thesis but let’s unpack the mobility sector. The talented entrepreneurs and investors in this space are working to fundamentally change how consumers interact and engage with their surroundings. They believe the days of single occupancy, gas powered cars are in the rearview and the future is smaller, shared, electric and tech enabled. And while there are amazing technologies that are changing the sector, like active safety from Hello Llama and scalable platforms like Joyride, if we are going to change the way people move, you can’t dance around the fact that those people are going to ride HARDWARE (HRDW $%!^).
How to succeed
To succeed in the hardware space, it starts with innovation. At my company Today, we consistently get the question “What makes your e-products different then XYZ company?” Our answer is simple, we have listened to the customer. They want intuitive, easily repairable, safe hardware. They want support after purchase (shocking I know, but it is a challenge in our space). They want to be safe. They want a roadmap so they can continue to deliver to their customers (Municipalities, Universities, etc.).
We take that input and set off to design those products. We deliver the above and are prepared to work through the challenges that come from designing, selling, and building products that human beings ride in the real world.
Yes, it is hard, but so is designing a software platform, a social media network, a marketplace or launching any company.
The answers are:
- The right team can de-risk investors’ concerns
- Focus on quality is a game changer
- Innovative business models (I love subscription for reference) are crucial
- Execution of a concept to a company is paramount
What’s next?
Innovative founders, we need to be transparent on the front end. Don’t hide behind vague business models and future pivots to SaaS. If you and your team are confident in your product, understand the need in the market and can execute, don’t be afraid to tell investors, “We build cutting edge hardware that fits a need in the market. We have the team and experience to execute. We know the challenges and would love to have you on the journey.” Then, don’t be afraid to hear no. This gives you the freedom to move on and find the right partner.
Investors – don’t be afraid to back hardware companies. As you know, the right jockey and pit crew (think that’s a horse and auto racing combo analogy), make the difference. In the electric mobility (MobiTech) space, the vehicles consumers ride are going to be the change agent. So, let’s wrap our arms around these founders, let’s collaborate around design, manufacturing and safety.
I have always been a strong believer that collaboration is key and while trade secrets and IP are important, for us to disrupt the auto industry, we all need to work together. The Total Addressable Market (TAM) is huge and there is enough to go around. Let’s work together to build the future of how people travel and interact with their communities. If we are all focused on delivering the best products and services to the market, we will have economic and environmental impact around the globe.
