Branding the hardware renaissance
Yesterday, crowdfunding platform Kickstarter passed $1bn in total money it raised to fund projects, ranging from charting the taste of a Chipotle burrito ($1,001) to shaking up the world of watches ($10.3m). It has never been easier to get funding for projects big and small. Meanwhile, 3D printing has mimicked the move of personal computers, shrinking from room-sized machines to neat little desktop devices, allowing for a fast prototyping process that shrinks development timelines from months to days, or even hours.
Combine the two, along with increasingly globalised supply chains and affordable manufacturing, and it's a perfect storm for hardware startups. Hot on the heels of software's democratisation, hardware is going through a renaissance.
What does that mean? For one, a new generation of hardware-based startups in desperate need of stellar marketing. Although at first blush it may seem there's a limited role for agencies in the new product ecosystem, advertising is more important than ever. As Marc Barros, former CEO of hands-free camera company Contour, notes that branding is even more important than distribution for hardware startups. He points to his competitor GoPro as a hardware startup that cracked that nut, creating a strong brand identity that went beyond the hardware itself.
At Contagious, we've chronicled the rise of innovative hardware startups in the Small But Perfectly Formed section of our magazine over recent years. Products like Play-i's programmable robots, Thalmic Labs' MYO armband, BRCK's mobile internet generator, Scanadu's health sensors and Fairphone's ethically-sourced smartphone have shown that small startups can compete with big brands, even when manufacturing and product development are involved.
Chalk some of hardware's rise up to the availability of accumulated knowledge online, which has vastly improved in the last half decade. 'The key to success in hardware is access to information about suppliers, manufacturers, techniques. The thing we spent the most time on was gaining access to that knowledge,' noted wearable fitness tracker Fitbit cofounder James Park at a recent conference. His hardware startup shipped its first units way back in December of 2009. Today, less than five years later, sites like Upverter serve as GitHubs for the physical world, while Marblar puts some of the globe's most interesting patents at the fingertips of entrepreneurs.
'Making things has become easier,' Benjamin Joffe, a managing partner at Shenzhen-based hardware incubator Haxlr8r, recently told Bloomberg. 'The cost and timeframe have been compressed to the point that some startups can go to market with a new product in less than a year, way before a large company.'
Haxlr8r is just one of many emerging incubators that have embraced the hardware boom. The lab's stated mission is to 'transform [hardware startups] into functional companies by providing mentorship, seed funding and immersion into an intense startup community of like-minded entrepreneurs'. Thus far, 29 companies have graduated from the programme, making everything from sous vide devices for home cooks to gadgets that let pet owners interact with their furry friends from afar.
Others of Haxlr8r's ilk include San Francisco-based Highway1, Brooklyn's New Lab, Boston's Bolt, Berlin Hardware Accelerator, Pittsburgh-based AlphaLab and Estonia's BuildIt. Brands, of course, have also gotten involved, with initiatives like Nike Fuel Lab looking for hardware products that build upon existing digital IP and APIs. Manufacturing giant Foxconn has also recently announced a move into the space. More programmes are popping up, it seems, on a daily basis, eager to encourage manufacturing Michelangelos.
So how do agencies get involved? To my eye, there are three simple ways to capitalise on the hardware renaissance, while helping the movement forward.
Get In On The Ground Floor / Minnesota agency Fallon has jumped onto the crowdfunding trend by offering up its services to startups in search of backers. Its Starter Kit is aimed at telling the story of products in a compelling way, from strategy development to video production and photography. And the agency isn't charging up front. Instead, it's getting in on the ground floor, tying Fallon's financial success to the success of each product, either as a percentage of Kickstarter funds raised or as an equity stake in the product itself, almost like a venture capital firm.
Partner With Accelerators / Agency R/GA has taken the lead in this department, partnering with TechStars to create an accelerator for connected devices in New York City. As Contour's Barros advised, R/GA is encouraging the ten startups in its programme to think about image as much as product. 'We’re telling them to think about their companies as brands that have a connection to consumers, R/GA COO Stephen Plumlee told Digiday. R/GA clients like Beats By Dre and Samsung are mentoring companies in the accelerator, and the agency has created a Ventures division to invest in the most promising graduates. Perhaps we can spawn a new axiom: give a startup a brand, gain a client for a day. Teach a startup how to brand, gain a client for a lifetime.
Mentor Talent / Since leaving agency-land in 2010, former CP+B CCO Alex Bogusky has been far from far removed. His latest venture, Boomtown, hopes to identify startups that can make an impact in the world of media, marketing and advertising technology. Similarly, design firm IDEO has launched a Startup-in-Residence programme in which the firm brings one young company at a time under its wing, helping it incorporate people-centric design thinking into the startup's DNA. In both cases, agency minds are identifying talented startups and helping them build a brand, even if their products seem primarily software-oriented. As frog design executive creative director Max Burton points out: 'When pixels dominate, your hardware is the brand.'
As for the future? Regina Dugan, who heads the Advanced Technology & Projects group at Motorola Mobility, thinks the emerging hardware ecosystem could someday rival its software counterpart. 'People think the Maker Movement is an edge movement,' she told Ed White in Issue 37's Wildfire Interview. 'It’s not. It’s coming from a basic desire for people to create things with their hands. We’re basically taking manufacturing capabilities that were previously only in big companies and we’re allowing it to happen at the individual level now.'
Those individuals are going to need some help building brands to go with their products, and it's up to agencies to step up to the plate.