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As someone who has developed hardware for >10y now, there’s one crucial mistake a lot of startups make: - Thinking that making hardware is profitable. Don’t g

As someone who has developed hardware for >10y now, there’s one crucial mistake a lot of startups make: - Thinking that making hardware is profitable. Don’t get me wrong, there’s some markets where hardware is profitable, but they are niches, and the prices might surprise you. As a reference, check the mechanical keyboard scene. Check out how much the components cost, and at what price those keyboards are sold. When it comes to general consumer hardware, a cursory look to hardware companies will show you that the margins are razor thin, the risk is real, the problems are many. You don’t build hardware to make money, nowadays you make hardware because it enables you to sell software. That’s a better approach for most “hardware” companies.

bawolff 6y ago
This may be true, but i think keyboards are a bad example. Keyboards are generic, there's been very little innovation in a long time, everyone knows how to make a basically equivalent product. The only real distinguisher between competitors is cost. That's going to drive margins to be razor thin. But not because its hardware but because the type of product a keyboard is. You would probably see the same thing in the market for hammers, cutlerly, etc.
- bobthebuilders 6y ago
  Mechanical keyboards, not regular keyboards.
  - hakfoo 6y ago
    That's a wildly malformed market too. You have a lot of oddities in the mechanical keyboard hobby. * For a while there was a lot of rebranding. Three or four of the most popular boards a few years ago were fundamentally the same Costar CST-104 with different logos. * Some of the legacy players (Cherry and Unicomp) were bankrolled by sales outside the enthusiast market. * There's a huge number of hobby projects that overlap heavily. A million "40/60% with an aluminium case and takes MX switches" kits. I suspect this offers poor economies of scale and the ability to hide large margins.

bawolff 6y ago

This may be true, but i think keyboards are a bad example. Keyboards are generic, there's been very little innovation in a long time, everyone knows how to make a basically equivalent product. The only real distinguisher between competitors is cost. That's going to drive margins to be razor thin. But not because its hardware but because the type of product a keyboard is. You would probably see the same thing in the market for hammers, cutlerly, etc.

bobthebuilders 6y ago
Mechanical keyboards, not regular keyboards.
- hakfoo 6y ago
  That's a wildly malformed market too. You have a lot of oddities in the mechanical keyboard hobby. * For a while there was a lot of rebranding. Three or four of the most popular boards a few years ago were fundamentally the same Costar CST-104 with different logos. * Some of the legacy players (Cherry and Unicomp) were bankrolled by sales outside the enthusiast market. * There's a huge number of hobby projects that overlap heavily. A million "40/60% with an aluminium case and takes MX switches" kits. I suspect this offers poor economies of scale and the ability to hide large margins.