Developing Your Design with the Help of a Hardware Accelerator
What Is a Hardware Accelerator?
A hardware accelerator is an institution that works to push forward the progress of hardware startup companies. Hardware accelerators provide help in the form of investment, networking, or expert consultation on any aspect of technical, business, and market development.
Why Work with a Hardware Accelerator?
Recently the availability and access to hardware development tools have made the hardware innovation space more competitive than ever. This means as an innovator or startup, if you don't have a way to develop your technology and grow fast, you will fall behind. The proliferation of successful software startup “unicorns” underscores the difficulties hardware startups face. Significant barriers that hardware startups must overcome include the up-front costs of developing a product and the need to often rely on new and "risky" technology.
The fundamental issue that hardware startups face is being "de-risked." Investors that are accustomed to more classical investments and software startups often don't see the value in a hardware startup until it has gotten past its early stages of proving the viability of the technology and establishing a business process that generates cash flow for manufacturing. It is incredibly difficult for startups to reach this stage if they have no capital or access to expertise. Hardware accelerators typically understand these risks better than other investment entities. They can gauge what it will take to get a hardware company to a self-staining point, and then boost them there as fast as possible.
There are different types of hardware accelerators that offer different kinds of services. I cannot speak to them all, but in my experience, it is amazing to see the transformation that happens to a startup that goes through an accelerator program. There is no real standard engagement model for accelerators. Some institutions just provide investment and a specific amount of time each week with mentors. Others offer exclusive access to their partnered manufacturing facilities. I’ve worked with accelerator programs that operate in this way:
The hardware accelerator assembles the project team.
The hardware accelerator invites the designer to participate in the program in exchange for a portion of equity in their company.
The hardware accelerator provides a cash investment as well as program services generally for 6-12 months, depending on the complexity of the project for a portion of equity in their company.
The hardware accelerator program services include direct access to a full team of electrical, mechanical, mechatronic engineers, industrial designers, graphic designers, business specialists, analysts, marketing specialists, lawyers, and a whole slew of mentors and partnering companies. The goal is to push forward development as quickly and effectively as possible.
When to Work with a Hardware Accelerator
Innovators often wonder when is the best time to consider working with a hardware accelerator? In my view, this would be after you have a proof of concept that can validate the value of your team, your idea, and your business plan. The hardware accelerator can help startups with the difficult phases of hardware development, but if you have no defensible technology to start with, there will not be much an accelerator can do to help. A classic example in my experience involved a company that developed professional-grade headphones that modulate sound according to the frequency sensitivity of the user’s inner ear. When the company first approached us, they did not have a working prototype. Instead, they came to us with a medical doctor audiologist, a firmware engineer experienced in audio digital signal processing, and some test results that showed that they had the ability to develop the technology that made them really unique. We were able to help with the rest.
Some traditional hardware companies are beginning to offer hardware accelerator services. Part of the motivation for this is the rapid innovations they see happening around them while their own innovation lags. Some companies have internal accelerators for their own engineering teams. Other companies build an accelerator model that helps external teams build things that may eventually complement their own product strategy. Some companies form hardware accelerator partnerships when hardware is not their area of expertise.
Hardware accelerators can help hardware startups in ways that traditional investors cannot, but it’s important to come with a solid proof of concept, a business idea, and a vision that demonstrates technical competency.