Marc Barros offers some solid tips for starting a hardware startup, which show that although there are similarities between the approaches for hardware and software:
Shipping a quality device is by far the hardest part of building a hardware company. I’m not even talking about the extra work it takes to deliver an amazing customer experience. I’m just referring to a product that doesn’t break, feels great when you use it, and delivers on the promise. Not just once either, but multiple times over, across thousands of units.
... the punishment for screwing it up in hardware is much more brutal:
Assuming you retail your product at $100 and it costs you $50 to deliver the finished product to your customer, you have $50 in profit.
Each time you deal with a defective unit it costs about $15 in shipping (to and from the customer), requires you to replace the defective product with a new unit from your warehouse that you can no longer sell, and spend about $5 to ship it back to the factory in buik. Even though your factory says they will reimburse the costs, it will take 60-90 days from the time you send the product back to agreeing on the root cause and in turn the financial reimbursement. In the meantime you are wasting your limited inventory and cash reserves replacing defective units.
Marc offers some solid tips for hardware startups, to avoid shipping a crappy product that gets returned a lot. Read more.
If you read this far, you should follow my RSS feed here.