Recently a Bangalore based hardware startup successfully raised more than $135,000 on Indiegogo to develop a low powered Bluetooth device called Gecko. The strartup, Connovate Technology, is one of the growing tribe of Indian startups that are rising up to the Hardware challenge.
Luckily the product was noticed by Apple’s co-founder Steve Wozniak, who then backed the project on the crowdfunding platform. But there are many who have tried and failed.
Bahubali Shete, the Managing Director at Connovate Technology, spoke to NextBigWhat on his journey building Gecko and the challenges faced by hardware startups in the current Indian ecosystem. Here is an excerpt from the interview.
What are the challenges of building a hardware product from India?
Quite a few:
1. Funding: It is not easy to get funding for tech-hardware startup as compared to software solutions. Even the finance community in India is yet to understand the potential of hardware startup and their valuation is very low. The finance community is not willing to take risks.
Upfront investment is mandatory for hardware startup, which means we need to live with seed funding only. This is also because of the fact that there are not many success stories in India.
2. Visibility: Getting visibility is difficult. Marketing and e-Marketing expenses are still prohibitive.
3. Customer acquisition: Customer acquisition is very difficult without ready product, market acceptance for hardware products and long penetration process.
4. Ecosystem: This is the most important challenge; The ecosystem is not conducive for hardware startups. Most of EMS are settled with defence projects or PSU or large CE product manufacturers and not willing to support small tech-start ups.
The lead times for hardware and enclosures are so high that we find it easier, cheaper and faster to get it done in China.
What in your opinion has changed from the past to make the ecosystem conducive for hardware startups?
New government policy announcements are raising a ray of hope but we are yet to see the real impact.
Why did you decide to go for crowdfunding? Did you face any challenges raising funds?
As a startup, the above mentioned challenges are really hard to overcome. Crowdfunding offers the best solution for all the challenges. If there is a credible idea, presented well with facts, crowd funding provides, funding, visibility, market penetration and customer acquisition. hence it is the best way to go for hardware startups.
Do you think the government’s plan to support the electronics and fabrication Industry will help startups in the hardware product space?
The ecosystem needs subsidies, relaxed taxation and statutory norms to enable hardware startups. Funding from government will surely help.
Outsourced Product Design is a big space in India. What has changed so that startups have started launching their own hardware products?
It is time that design houses start realising the potential of hardware products, instead of looking for quick money, long term product and brand development, as it is more important for themselves as well for the country.
One thing that every startup should think and act is to see global market as their playground for the game not just India. Focussed approach and doing one product at a time is very important.