No, it’s not “Don’t start a hardware company”.
Yesterday it was announced that Doppler Labs, a promising startup with over $50 million in funding, a founder named to the Forbes 30 under 30 list and a product set to disrupt the entire hearing aid industry would be closing its doors. Why? Because they couldn’t sell product.
Why couldn’t they sell their product? Because the initial product didn’t meet the expectations of its users. According to Business Insider, A big reason the Here One didn’t sell is because a design flaw gave it lower-than-expected battery life, plus an issue where the charging case didn’t work quite right. It meant early word-of-mouth was worse than hoped for. A hole only only big tech companies with big pockets can dig themselves out of.
If you’re part of a hardware startup, there are some important lessons you can learn from Doppler Lab’s unfortunate fate.
1. When Your Startup Launches, You Have One Shot. It’s All You Can Afford.
Brian Hall, Doppler’s CEO told Business Insider “Even hardware from the big guys has flaws — the first Microsoft Surface RT tablet was a famous flop, after all. The difference is that Microsoft could afford to pick itself up off the floor and find a fix, while Doppler had an extremely limited cash supply”. This couldn’t be more true in a time when 5 major tech companies run the market. Speed is everything, but it’s nothing if your product doesn’t work. You have to approach a launch knowing that a larger company is right on your tail. If the issue cannot be fixed within weeks of launch, you’re a sitting duck. And that’s exactly what happened to Doppler.
Undisputedly, the biggest flaw that plagued Doppler was its battery (and that is not a quick fix). Doppler’s co-founder told Wired Magazine “We focused so much on size and compactness with Here One that we kind of compromised battery life.” Compromised is putting it lightly, the Hear One could barely last 2 hours on a full charge. And at a $300 price point, they completely lost the opportunity to replace everyones regular headphones. I spoke with many Doppler customers and they all told me “I really wanted these to be my go to cans, but I simply can’t with a battery like this.” Doppler did not meet expectations and because of the battery flaw, left everyone asking “why would I want this?”.
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2. Money Can Be A Curse, Not A Sign Of Promising Success
Doppler Labs raised $50 million dollars prior to having any real sales numbers on the Hear One. With money comes employees, investor pressure, health benefits, office space, furniture and again BIG expectations. I recommend not taking any institutional funding until you have 1.) significant sales, 2.) a re occurring revenue stream and most importantly 3.) a mass produced product I knew met my customer’s expectations. Save money by hiring freelancers, seeking small investment from friends and family and moving into your parents basement. Of course starting a hardware business this way is hard, you won’t collect a paycheck in over 2 years, but you also won’t owe paychecks to 10+ employees or office rent. Doppler put the cart before the horse, which was a main part of their downfall. If product sales are your main revenue stream, make sure your product sells first. If the products aren’t selling, you have a big problem.
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3. Speed Is The Only Advantage Your Startup Has Over Big Tech. Without It, You’re Not Attractive
Anything we small startups make can be replicated and better marketed by Google, Apple or Amazon. When any of these big companies feel they can launch before you or launch a product later but with better features, you’re dead. For Doppler, they fell victim to both. They didn’t launch before Apple Airpods and they didn’t work as well as the Google Pixel Buds. That’s why I was shocked to hear how cocky they acted in the summer of 2016 when they thought Doppler could be acquired prior to mass producing a product. Big tech has learned its lesson when it comes to sexy prototypes. Lanman revealed to Wired “We were definitely irrationally confident, we were signaling that we’re not desperate at this point, so if you want us, it has to be proactive. That might be why, at the end of the meetings, everyone responded the same: they loved the tech, but wanted to see Doppler actually mass-produce and sell a product.”
4. Meet Expectations
Doppler launched a product that couldn’t replace your go to headphones. Money is nothing without a product that works and meets the expectations of your customers. Disruption is nothing if you can’t gain the customers with the better product. Plain and simple? Make sure the product works as advertised, and make sure you are meeting the expectations of your consumers.
From One Ear To Another,
Founder & CEO, Hooke Audio