Luka Birsa is founder of Visionect d.o.o, Slovenian hardware startup that’s working with e-paper and e-ink technologies and here are my notes from his talk with title – How hard it is to run a hardware startup? at Kiberpipa’s Open Lectures.
Who or what is Visionect
- Three founder, with 5 employees
- Members of TP-LJ and LUI
- Founded 18 months ago
- They’re working in hardware and software business
So what’s a product
- Wireless screen display + application eMenu
- eInk – e-paper
- low power wireless technology (2.4Ghz proprietary)
- touch screen (projected capacitive)
- low power software concepts (thin client)
Very robust devices with long autonomy.
Why hardware startup?
- Hardware is cool because you can show it to your mother
- You can add LED’s to it and things blink then
- Hardware is cool because you actually take it into your hands
- Luka + Matej – consulting to hotels with IT decisions
- Rok has an idea – lets make electronic price tags for stores (ESL)
- Sounds like a good idea and they try to do it!
1st romantic point of view – doing hardware is simple
- You Google it, draw the integrate curcuit
- You write a software
- You buy components, you start producing
- You can do this really fast
1. There’s too much choice on the market. Too much choice and data sheets are terrible. You can easily get samples but are useless.
Drawing circuit for yourself is not drawn it for CE certification.
2. You need additional software to do this as well as prototype boards or prototypes of your own product.
3. It’s not worth buying under 1000 pieces and delivery times are around 12-13 weeks. All the distributors are not the sames.
Quality certification ISO 9001 and similar does not equal product quality.
4. The profits are low because of bad partners and problems. It takes about 3 times as long as projected! And you still don’t have certification.
2nd romantic point of view – Slovenia does not equal world
- Lets do ESL
- E Leclerc doesn’t have them, others do
- It seems like a viable niche
- Lets make cool technology and sell it – projected price was 30 eur for 1000 pieces using Zigbee and bistable displays
- The world is ours
1. Slovenia != Europe != World
2. ESL is already a big market with establish market players
3. Actual production cost > 30E.
4. The actual cost is 7 euros per piece
3rd romantic point of view – all that you need is a good business idea/plan
1. Good idea with a good team
2. Good business plan
3. 2 months of looking for seed money + 2 months to do things = money
1. Good idea doesn’t mean Hi-Tech; Hi-Tech + Slovenia = Problems (FAIL)
2. Good business plan – easier said than done:
Software startup – Hardware startup
Expenses: Less More
Time to market: Less More
Dependency on others: Less More
3. Crash course of investors:
- The never say no
- When they say maybe, it means “no”
- One months is three months
Is there anything positive about it?
- There’s already a slew of software startups, so it’s hard to make your investors enthusiastic about your startup. Hardware is as such a plus 🙂
- Nobody does hardware anymore. Easier to bootstrap and more in sourcing offers. New partners, new experiences = better chances for future offer.
- It takes long to invest = good thing in HW startup. More time you have, easier to bootstrap, better business plan etc.
- Long time to enter the market means the same for your competition. Little playes will have hard time cloning your products and big ones are slow to change.
Tips for hardware startups
- When planning, have lots of buffer space
- Talk to other people. You can’t find everything on Internet.
- If you can use off shelf solutions – use it! Never make things yourself! You can’t imagine how hard it is to actually make your own hardware.
Where’s Visionect at the end of this path today?
- Connected with one of the biggest OEM producers in the world
- Lots of experience with producing hardware
- Working prototype of eMenu and BPS system.