Hacker News Reader

Comment by pdx | Hacker News Reader

Hardware is expensive. Plastic injection tooling, PCB fabrication, PCB assembly, component purchases, FCC and EU and UL testing and certifications. Something like Kickstarter makes it possible for an engineer, such as myself, who does not have $200K in the bank, to use the skills I use every day for large companies, and create something new in the world.

For somebody to suggest that the one endeavor that needs Kickstarter type pre-funding the most, be the one endeavor that should never be entitled to it, all because they're mad because their own attempt at funding was rejected, pisses me off.

Promoting some sort of system where I get money only after I'm ready to ship, leaves me scratching my head. If I have a warehouse full of product ready to ship, I can go get traditional purchase orders the old fashioned way. What problem would such a system be addressing?

View on HN

A pledge to buy something can be converted into money. In traditional industries it's quite common to get bank loans against accounts receivable and/or outstanding purchase orders.

Without a history of delivering product, a bank won't give you a loan against pledges (aka PO's), but there certainly should be lots of people who would give you a loan or buy equity.

If you can say to a VC "I've got a million dollars worth of orders, I need $500K to build them", you've got a much stronger story when talking to VC's than most do.

You really think a bank would give loans against Kickstarter agreements to purchase something?

I think that's his point. A bank wouldn't do that if you did not have a history of delivering.

Exactly.

Hardware needs pre-funding more than anything. The article is opening up a discussion for alternative models that work better than Kickstarter.

The problem with Kickstarter's approach is that oftentimes, the reality of the product is divorced from the perception of the product. There are countless examples of high profile hardware products that failed to deliver on expectations. That hurts the Kickstarter brand.

Kickstarter can't be expected to guarantee projects. It's too costly. And it opens them up to liability.

I'm not suggesting that self-starter is the final version of this model. It's an evolutionary process - and an opportunity for a new startup with a different approach.

> Hardware needs pre-funding more than anything.

If you can demonstrate demand, funding will become a second order problem.

If this were true, would we not see more truly hardware startups in existence? There are countless hardware products that have demand, yet go unfunded or are not attractive to VC's because of the large upfront costs or various market / IP concerns. Ever tried to develop and then manufacture an ASIC before?

Hardware is just that, "hard". Crowd funding, or crowd "pre-ordering" is just one approach to give these types of companies a fighting chance at marketing and developing a product. If it were not for the lack of project accountability and poor hardware track record, I think Kickstarter would be a very good solution towards some of these issues.

Unfortunately until this changes, I think backers might have a better chance at the casinos. At least you have fun losing your money there (usually)!

I think there are plenty of reasons one does not see more hardware startups, but I would argue that 'lack of funds' is more likely being used as an excuse to mask deeper problems.

One can expect bad things in any venture where the development costs exceed the expected return. If anything, this would be an argument for general purpose computing and not shouldering the cost of developing an ASIC.

If you would like to see a Kickstarter with better project accountability and a hardware focus I suggest looking at Christie Street: https://christiestreet.com

I agree.

One of the problems with the Kickstarter model is that companies were offering product in exchange for funding.

They should have been offering stickers and mentions on a "Thank You" page, or tours of the factories, or some such. That would have created better expectations in the minds of funders.

Or they could have offered vouchers - "Pay $X, we give you a voucher that entitles you to one free widget if we go into production".

The current "challenges" question is not being answered as well as it could by several projects. It feels a bit like the "What are your weaknesses" interview question, where people are dodging the real answer and giving feel good sound bites. I have a lot more trust in the projects who make a solid attempt at answering that question fully.

Given the amount of experience and equipment required for hardware projects perhaps there's room for a hardware incubator?

There are hardware incubators. Lemnos Labs is the one I can think of off-hand.

Reply on news.ycombinator.com