How to get your Kickstarter hardware made fast and succeed (the numbers don't lie)

Its ARM Kickstarter week and I must admit that as we dig into all things Kickstarter I am amazed by how much is happening, for those who have long and non-volatile memories, it’s like a Heathkit or Altair being born every week:

[Heathkit, left, Altair, right]

This may sound a little hyperbolic but with so much electronics innovation happening so quickly history tells us that some of these companies are going to change our industry forever, this we know - but as we all know getting from the idea to a finished product is not trivial, so I thought we should hear from Cyril Ebersweiler of HAXLR8R (aka HAX) about how to make the dream a reality. I first met Cyril in the summer of 2012 in Shenzhen, China at Seeed Studio purely by chance, it’s a long story but you can read about in my EETimes blog.

Cyril (photo above) founded HAXLR8R in 2012 and its business model is simple; startups apply to join a “class” and if are accepted they get $100k to finance their company in exchange for equity. This model is now fairly common with Y-Combinator being the most famous example.

The unique value that HAXLR8R (aka HAX) brings to hardware startups is their experience and connections in Shenzhen where a hardware startup can take advantage of low cost and rapid China manufacturing. I Skyped with Cyril from their new 15,000 square foot space atop the famous Huaqiangbei market in Shenzhen which is fitting because the largest physical electronics market in the world is just a few floors below him. I am not exaggerating when I say the market is one of the wonders of the modern world - its size is mind boggling and you can wander from hall to hall looking at every electronic component available in the world today (don’t believe me?), if you are in electronics and ever get to Shenzhen or Hong Kong, you owe it to yourself to visit Huaqiangbei.

I approached this interview with the misconception that HAX helps companies get their products made after they had a successful Kickstarter but Cyril pointed out it’s the other way around. HAX helps create companies who can launch on Kickstarter and they have now invested in 50 companies. You can see a list of the HAX companies on their Kickstarter page (see pic below) and it's impressive, but there’s a lot more to this than meets the eye.

Cyril told me of the 50 companies they have funded only 1 has failed so far, and they have another 50 ready to go in 2015, so the growth is accelerating. Having 1 failure in 50 compared to traditional VC funded companies (where on average 90% fail) is a startling statistic, but remember these companies are market tested by Kickstarter and the HAX team get them to market fast. This process means startups can skip a seed round and go straight to a series A for further funding because they are viable and profitable much more quickly than the VC route. Below is the 10 step program that companies go through to be part of a class:

I asked Cyril about the design process and he said almost all of their projects are prototyped on an ARM-based development kit like an Arduino, Raspberry Pi or Beagleboard and are then productized by a combination of the engineers on the HAX team and the startup depending upon their skill level. Most projects are aiming to ship 1,000 to 5,000 units in year 1, but Cyril is seeing more projects shipping up to 10,000 units as the Kickstarter market expands. This brings me to the most important part of our conversation which is where he thinks the market is heading. Cyril admitted they have a growth problem with many more companies coming to them than they can currently handle but they are scrambling to keep up. Cyril thinks we are just at the beginning of a whole new wave of product development and it’s going to change the distribution and retail world forever. Each project Cyril sees is one step closer to the next generation of smarter hardware and I quote “it’s putting the power of the smartphone inside smart products”, here at ARM we couldn’t agree more. 

If you want to join the revolution and get your idea to market with HAX go and apply for the next class.