Hardware Isn’t Hard, Competing with Apple Is Hard
hackernoon.com
hackernoon.com
Nope. The "magic" of Airpods (I own a pair) is quick synced pairing. Startups like Dopplr can't provide that "magic" for iOS/Mac users because Apple doesn't enable the requisite access on their software. Dopplr, Bragi etc are better than Airpods but Apple controls many of the devices they need to interface with so they are fucked.
The lesson is don't design your hardware to match Apple and primarily at Apple users. They will cut the legs under you
I just stopped by their site and saw their farewell message. I could 50+ people in the photo. That's 50 salaries this startup had to absorb every month. If we assume 100k real cost per head (recruiting, pay, benefits, etc) then we're at $5m per month on salary alone. If it took 2 year from idea to product, then you're in the hole $120m. If you sell these headphones with a markup and post-everything margin of $30 per set, which seems reasonable, then you need 4m in sales to break even. That's a serious amount of sales to push through.
The numbers look more reasonable now, but ultimately its a hard sell especially when Apple doesn't actually need to make a profit for its accessories, but you do. Even then, what's the market look like for this without an Apple. I suspect not very large and its Apple's own marketing efforts that have gotten people interested in these tiny wireless earbuds anyway.
Do you have data to support that claim?
Amazon might sell hardware at cost or a loss, but Apple most certainly only sells hardware when two conditions are met: a) they can make a better device and b) they can make money
Syncing is usually relatively painless but reliably and "instantly" reconnecting is a long ways off. I have maybe a 50% success rate without going to Settings>Bluetooth and clicking on the device. That inexplicably fails about a quarter of the time and I have to powercycle the speaker and toggle bluetooth off/on a few times until it decides to work again.
That rate drops to basically 0 if the speaker is paired to multiple phones, or there are multiple speakers in range of my phone.
If I had to deal with that multiple times per day like with headphones I'd just give up and return it.
I have one absolutely reliable connection (turntable>bluetooth transmitter>stereo) but even that one takes about 15 seconds to establish after turning everything on.
The pairing part is just a one-time thing and yes, the experience is nice, but pairing ease isn't the primary selling point. My portable Bose speaker paired almost as quickly as AirPods.
Criticism of AirPods is almost universally from people who've never used the product.
The exact same product under another brand ... well, we may not have ever heard of them.
Apple is still a 'highly functional incumbent' - and since it's always a bad idea to go up against incumbents even when they are dumb and lazy (usually they are, this is what incumbency does) it's a doubly bad idea to step in front of the Apple Mack Truck.
Apple is still doing the 'evolve iPhone' thing and they can only do that for so long. The 'let's build a big fancy building' step is often sign of peak-ego, we'll see how long they go from here.
Oracle, SAP etc. - look how long they can remain relevant just by doing small iterations in their software - they can hold business clients to the bone.
I wonder if a consumer company can do the same. Their brand has a lot of built up value, and I don't see either Google or Samsung stepping up to the plate ... but cycles are fast in consumer land and consumers are fickle ... and unlike Nike where the 'tech' really is just for show ...
It will be interesting to see how this plays out.
They do seem to be trying, though, at least if their ad campaigns are any indicator. Google in particular seems to be positioning itself as a viable Apple competitor both in terms of the device itself (in this case, the Pixel line and its myriad of capabilities) and the branding around it (by tying in to the rest of Google's product line, particularly around search).
Samsung, meanwhile, seems to have the first part of that down (and has done so for as long as the Galaxy line has existed, much to Apple's chagrin), but the second part is kind of missing there.
The new CMO is from Burberry, and I think she will keep things humming well.
Johnny Ive is still participating, so they have a design front established.
Engineers can think of cool new things.
So they have a lot of momentum.
But still ...
There was a time before Apple, there will be a time after Apple :) ...
Not that this keeps me from thinking HW ideas, and SW is great too.
In software, you can write a function that doubles big numbers perfectly until it hits limits of CPU and memory in about one line of code. If you try implementing the same function in an analog circuit, you'll encounter compounding noise depending on heat, ambient EMF, adjacent components, etc.
Upon identification of a critical bug in your SaaS product, one `git push HEAD` is all it takes to get the fix to your millions of users. Hardware is not anywhere near as forgiving--your batch is usually lost.
These characteristics require a different approach for developing hardware-leaning products. Everything needs to be far higher quality before release, because small hardware mistakes can have several order of magnitudes higher of costs than software bugs. That's why it's harder: you have to land a rocket on a planet with fewer chances to correct your course.
My first job was at an HW startup and I launched a dozen hardware products. It's tough. A screw-up at a single soldering station in Shenzen can screw-up a deal years in the making with Walmart. Overordering materials means you have to lay off friends.
But saying "Hardware is Hard" is an oversimplification.
When we say that to explain the failure of HW startups, we miss a lot of important nuances. Hardware is hard, but that's not the primary reason most HW startups fail. Almost all of the high-profile failures we see in hardware are companies that are trying to be the "Apple of X."
In this post, there are two hardware startups, valued at nine-figures, that are essentially bootstrapped. Hardware was hard for them too, but they managed to win with very little in the way of resources.
Also, the idea of taking the B2B route and avoiding consumers is great; consumers have high expectations and are a very well served market.
But all of these are hard -- it only looks easy in the books.
What I hear in this quote is "we went into a technological field we know nothing about with the intention of making money. We shouldn't have done that".
Nothing wrong with going into hardware if you have experience end-to-end bringing a hardware product to market. It's just that less people have that than in the software world, and us software people get used to being able to figure out everything JIT.
Probably don't go into chemistry either, or algotrading, or practicing law, thinking "eh, I'll figure it out as I go".
It did some useful things, but it needs to evolve.
Mind you there's a few similar things in software, things like security requirements when handling payments, EU privacy laws, cookie banners, that kinda thing. But they're a lot easier to either outsource (use a payment processor service) or implement (cookie banners range from a notice that says "by using this site you agree to cookies", which probably isn't enough for the law but reasonably user-friendly, to full off-site cookie walls.)
Most real hardware companies that I recall failed for reasons other than hardware. Which fits with the author's overarching argument.
When people imagine a hardware company failing, I think most imagine something going terribly wrong with prototypes, some failure in the field, manufacturing failures, overbuying, etc, etc. But I think those events are rarely fatal for real hardware companies.
I say "real hardware companies" because those kinds of failures are endemic with crowd funded hardware startups. And I think that's why most people assume that all hardware companies fail for those reasons, because crowd funded hardware startups get so much public attention.
But outside of the crowd funding bubble, my experience has been that those kinds of events are just normal bumps in the road. We were on razor thin angel funding, and we hurdled all those kinds of problems. What really kills hardware startups is what kills _any_ startup. Bad product-market fit.
Over the decade of my involvement with my previous hardware startup, we watched _tons_ of fellow hardware startups die. Not because they hit some manufacturing snag, or shipped a million units of explosive doorstops. Every single one died because no one wanted their product. The classic startup tale.
Perhaps I have a unique perspective on the whole software startup versus hardware startup thing because I'm a jack of all trades. I'm just as comfortable working software as I am hardware (and boy does that duality come in handy). So I've seen both sides from the trenches. Hardware people will tell you it's harder, because they don't know how frustrating real software development is and assume it's some kind of greener pasture. And software people will tell you it's harder, because hardware is a mystery to them.
I've wasted days dealing with Google Cloud's SDK issues. And I've wasted just as many days chasing a defect in a board remotely with a customer half way around the world.
In other words: The grass is not greener on the software side.
That's actually a good thing. First revision hardware is going to have issues and building a beautiful product and putting in a beautiful box will set you up for disappointed customers.
Either do what MakerBot did, and embrace the DIY enthusiasts as your first market, or do what Misfit did, downplay the tech features in favor of a more fashion forward aesthetic. But running headlong into the buzzsaw that is Apple seems like a recipe for failure.
* The cost model is different.
* The hiring model is far more interdisciplinary.
* You can't apt-get your supply chain.
* There's near zero real world A/B testing.
* You're at the mercy of far more external factors.
Relative to SaaS, hardware seems Sisyphean.
>Do the opposite of what Apple would do
Count how many Chinese companies just jack into Apple lookalike market or market for goods designed along the same line of thought.
Take Rapoo for example, once an unremarkable company. What elevated them to the current level was a big bet of proper design. Their first red dot winning product was designed by an intern that they almost had fired for insisting on design that "does not look enough like apple".
I also see no surprise if a company like Jawbone gets into "last mile operational impediment" what in reality was just the usual result of company not having engineering expertise.
Here, I'd say lies the greatest rift in between SV style software startups that take quality compromise in code as something usual and a normal hardware company that knows that a broken product is literally simply broken with all resulting material losses
1. Cost and pricing models. This is very difficult especially when you're not big enough to place larger production runs. You don't have economies of scale here. It's expensive to manufacture just a few boards at a time.
2. Manufacturing/supply chain points of failure.
3. Hardware points of failure (buggy vendor chips etc.) which could easily derail a project. Hardware isn't as malleable as software too.
4. Long product development times. Your first version of the product can quite easily stretch out to many months or even years. This is a huge risk from a shareholder's perspective.
To gain some context into hardware manufacturing, I recommend reading:
The Hardware Hacker: Adventures in Making and Breaking Hardware by Andrew Bunnie Huang.
So what is it? Hard or not?
1. Apple products are glossy and polished, aiming to capture the premium end of a large consumer market for very complex products.
2. Doing this better than Apple is very difficult.
3. However, other less difficult business opportunities exist.
Apple also maintains very high margins, something that leaves more than enough room for another company to compete on price. The trap here is instead of producing a good product at a better price, most companies produce the cheapest possible product in a race to the bottom.
Find something Apple isn't doing, doesn't seem interested in doing, and use their business model. It worked for Nest. It worked for Tesla. It could work for you.
You just made the case against this. The fact that they won't make an IoT blender is why they're hard to compete with. Apple is the polar opposite of Google in so many ways but a big one is their organizational mentality of "more wood behind fewer arrows". Apple is the batter in a no-called-strike baseball game (to borrow a Buffett quote) which means they're only going to swing when they get a fastball right over the plate.
Apple has high margins but it's actually because they have the lowest costs. In Porter's terms, they're the benefit leader but they're also the cost leader.
>Find something Apple isn't doing, doesn't seem interested in doing, and use their business model.
This isn't actually competing with them then. This advice is probably valid, but you're basically saying to just be the Apple of some other industry (like Keurig or Nespresso).
There's a lot of other industries that need an Apple and don't have one. Who is the Apple of toilets? Of mattresses? Of 3D printers? Of blenders?
Some have leaders that succeed not based on having a superior product, but by their crushing marketing pressure and omnipresent retail representation. They're ripe for disruption.
This is what companies like Anker and Aukey are doing too. They compete directly against Apple's accessories with a well polished, durable product, for cheaper than what Apple charges.
I recall being virtually unable to go a commercial break without seeing at least one iphone feature demo ad right after launch in my part of the world.
With Apple it is just as much about attention as it is actual products. They have managed to make the choice of phone or computer into a lifestyle signal that their competitors can only dream about.
Oh, and i recall the Palm CEO talking about how when they were designing the Pre they constantly ran into Apple having bought up whole factory outputs of part Palm wanted to use. End result was that Palm constantly had to go with their second best choice.