Built physical things with Shenzhen and leverage what made shanzhai possible...

1. HAXLR8R
[TC DISRUPT BEIJING]
FROM MADE
IN CHINA
TO MADE
WITH SHENZHEN
PROUDLY
MADE
WITH
SHENZHE
N

2. AGENDA
1. Hardware Renaissance
2. The HAX approach
3. Beware of the12 Wares
4. Why Shenzhen
5. From Shanzhai to Startups

3. 1.
HARDWARE
RENAISSANCE

4. HARDWARE RENAISSANCE
PROTOTYPING IS EASIER THAN EVER
Arduino / Pi / Spark / 3D printing / Sensors /
BLE / Smartphones / Cloud
SUPPLY CHAIN IS BETTER THAN EVER
– China (Shenzhen) has the whole chain
– Fast, Affordable, Scalable
MORE FUNDING
– KickStarter (250,000+ HW backers!),
IndieGoGo
– More VC & Angel money, acquisitions

5. HARDWARE RENAISSANCE
PROTOTYPING IS EASIER THAN EVER
Arduino / Pi / Spark / 3D printing / Sensors /
BLE / Smartphones / Cloud
SUPPLY CHAIN IS BETTER THAN EVER
– China (Shenzhen) has the whole chain
– Fast, Affordable, Scalable
MORE FUNDING
– KickStarter (250,000+ HW backers!),
IndieGoGo
– More VC & Angel money, acquisitions

6. HARDWARE RENAISSANCE
PROTOTYPING IS EASIER THAN EVER
Arduino / Pi / Spark / 3D printing / Sensors /
BLE / Smartphones / Cloud
SUPPLY CHAIN IS BETTER THAN EVER
– China (Shenzhen) has the whole chain
– Fast, Affordable, Scalable
MORE FUNDING
– KickStarter (250,000+ HW backers!),
IndieGoGo
– More VC & Angel money, acquisitions

7. VALUE CREATION

8. 2.
THE HAX
WAY

9. A NEW KIND OF ACCELERATOR
Hardware only
High Touch Support
Ecosystem driven
Target : 100% Survive & Thrive

10. IN THE “SILICON VALLEY FOR
HARDWARE”
111 days in Shenzhen
$25-$50k for 6%-8%
SF Demo Day

11. PRINCIPLES
Build the right thing
Build things right
Ship fast

12. FOUNDER EMPOWERMENT
Curriculum
Ecosystem
Meaningful Products

13. HAX STARTUPS
50 Startups (5x10)
97.5% Survival rate
(39/40)
30/10/10 US/EU/Asia

14. HAX PEOPLE
130 HW Startup Founders
50 Mentors & Advisors
10 Full-time partners &
Experts

15. HAX FUNDING & CROWDFUNDING
100% Crowdfunding success
(21/21)
$200k Average backing
$m In products sold
75% Follow-on funding

17. MEDIA COVERAGE
“Lean Hardware” Series

18. HAX APPROACH
• Global selection
– Functional prototype
– Something hard
• HAX Support & Curriculum
– Positioning / Productization / Launch
– Founder empowerment
• Long-term thinking
– Foundation for the future
– Ecosystem + Office access + HAX Fund

19. RE-POSITIONING
PROBLEM
SOLUTION
PROBLEM
NEW SOLUTION
NEW PROBLEM
SOLUTION
NEW PROBLEM
NEW SOLUTION
PROBLEM
SOLUTION

23. SLUMBOR

25. LEAN HARDWARE PRINCIPLES
1. Validate problem vs. Assume
2. Partner w/ factories vs. Abdicate
3. Fast to market vs. Long cycles
4. Capital effective vs. Capital
intensive
5. User backed vs. Venture
backed

26. SCALING HARDWARE STARTUPS
PROTOTYPING PRODUCTION SCALING
$
Founders
Friends
Family
Fools
Crowdfunding
Accelerators
Angels
Grants
Sales
Factoring
Banks
VCsPre-orders
RETAIL
CHASM
TIME

27. 3.
BEWARE
OF THOSE
12 “WARES”
wow
such excite
very hardware
so future

28. FUNWARE
1. FUNware No business

29. CHINDOGU
1. FUNware No business
Kenji Kawakami
Chindogu pioneer
+ tissue roll headgear
+ eyedrop glasses

30. MORE CHINDOGU
Baby mop
Open eyes stickers Back scratching grid

31. FUNWARE
1. FUNware No business
(includes NICHEware and ARTware)

32. RUBIK’S CUBE ROBOT SOLVER

33. FLAPPY BIRD MACHINE

34. FLAPPY BIRD ROBOT

35. ANIMATED “PENIS WALL”
Kinetic sculpture (81 3d-printed penises) by Peiqi SU @ NYU ITP, 2014

36. EASYWARE
1. FUNware No business
2. EASYware Not defensible

37. EASYWARE
1. FUNware No business
2. EASYware Not defensible
“Two sensors
and an app”
Nobel-grade
research

38. PRESSY
1. FUNware No business
2. EASYware Not defensible
PRESSY ($27)
Funded Oct 2013
Raised $695,000

39. PRESSY
1. FUNware No business
2. EASYware Not defensible
Speed Button ($10)
(“kuai anniu”)
Funded Jan 2014
Raised $34k

40. PRESSY
1. FUNware No business
2. EASYware Not defensible
Xiaomi MiKey
($0.8)
Launched April 2014
“If Xiaomi starts producing
buttons like Pressy,
we will start to produce
smartphones.”
- Founder of Pressy

41. SAMEWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning

42. THE BETTER MOUSETRAP MYTH
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
“Build a better mousetrap and the
world
will beat a path to your door”
Ralph Waldo Emerson
(maybe)

43. THE BETTER MOUSETRAP MYTH
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
The problem with
mousetraps
• 4,400 patents since 1879
• 400 applicants per year
• “most frequently invented
device in U.S. history”

44. 47 companies launched 3D printers
and raised $100K+ or more in crowdfunding.
Source: Flybridge Capital Partners, 2014.6
COMMODITIZATION

45. THE FIRST WAVE IS OVER
• First wave of hardware startups
–Activity trackers Fatigue + MiBand at
$13
–Smart watches Crowded
–3D printers Makerbot or cheap
clone

46. THE FIRST WAVE IS OVER
• First wave of hardware startups
–Activity trackers Fatigue + MiBand at
$13
–Smart watches Crowded
–3D printers Makerbot or cheap
clone
• Next generation has to be MUCH
better

47. SOLUTIONWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem

48. 1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
“When you have a hammer, everything looks
like a nail”
THE HAMMER PROBLEM

49. VAPORWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made

50. BACK TO THE FUTURE
HOVERBOARD
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made

51. DROPKICKER
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made

52. LAMEWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec

53. WHEN SOFTWARE WAS STILL
HARDWARE…
LANDFILL IN NEW MEXICO FULL OF GAME CARTRIDGES…

54. WHEN SOFTWARE WAS STILL
HARDWARE…
5.5
weeksCREATOR NOW A PSYCHOTHERAPIST FOR SILICON VALLEY'S HI-TECH COMMUNITY

55. FAILWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing

56. BUILDING SOMETHING (ALMOST) NOBODY
WANTS

57. LATEWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors

58. “WHY LOCKITRON HAS TAKEN SO LONG TO
SHIP”
(CROWDFUNDED WITH $2.3M IN 4Q2012)

59. LOSSWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins

60. “YOU WILL BE RECEIVING SHRU AT COST
PRICE.”

61. BOREWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it

62. BIGGEST TREND IN
WEARABLES?

63. CHINA’S BAROMETER

64. Mi Band by Xiaomi
Fitness Tracker
($13)
-
Counts your steps
Vibrates you awake
30 days standby
Water resistant
BASIC FITNESS TRACKERS ARE
DONE

65. FUTUREWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it
11. FUTUREware No market before years

67. LOCALWARE
1. FUNware No business
2. EASYware Not defensible
3. SAMEware Bad positioning
4. SOLUTIONware Solution looking for a problem
5. VAPORware Can’t be made
6. LAMEware Not on spec
7. FAILware Successfully built the wrong thing
8. LATEware Validated market but woke up
competitors
9. LOSSware Minimal or negative margins
10. BOREware People stop using it
11. FUTUREware No market before years

68. GALAPAGOS SYNDROME
“Fantastically evolved and
divergent from their mainland
cousins.”
Takeshi Natsuno
i-mode creator & Keio Univ.
Professor

69. NOT JUST JAPAN!
“SMS set back the
mobile Internet by 10
years”
–1999: i-mode in Japan
–2007: i-phone

70. SOME EXTRAS
13.TEMPware Temporary solution

71. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition

72. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition
15.ALIware Repackage a product sourced on Alibaba

73. ALIWARE

75. ALIWARE OR STORYWARE?

76. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition
15.ALIware Repackage a product sourced on Alibaba
16.INFRAware Requires special infrastructure

77. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition
15.ALIware Repackage a product sourced on Alibaba
16.INFRAware Requires special infrastructure
17.SOLITware Single founder

78. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition
15.ALIware Repackage a product sourced on Alibaba
16.INFRAware Requires special infrastructure
17.SOLITware Single founder
18.AWKware Awkward form factor, usage or image

79. TEDDY LOVE
Teddy Love is a unique, discreet, sexual toy
that provides pleasure through dual,
vibrating mechanisms in Teddy's nose and

80. SOME EXTRAS
13.TEMPware Temporary solution
14.WEAKware Limited value proposition
15.ALIware Repackage a product sourced on Alibaba
16.INFRAware Requires special infrastructure
17.SOLITware Single founder
18.AWKware Awkward form factor or usage
More ideas welcome!

81. 4.
WHY
SHENZHEN

82. 3 OLD MYTHS IN 1 SENTENCE

83. 3 OLD MYTHS IN 1 SENTENCE
“China only makes
cheap stuff
at scale and
copies”

84. TODAY’S REALITY
• Your iPad
• Start from 1 unit
• IP is at risk if:
–Your product is trivial
–You pick the wrong
partner
–You’re already successful

85. THE COST OF NOT BEING IN CHINA
“You have to consider
the cost of not being
in China.”
Will Hart
Chief of Staff
Spark.io
(HAX 2)

86. WHAT ABOUT MY IP?
“Protection of IP can be
complex
manufacturing or
product, community,
and cloud based
services.”
Idan Beck
Founder
gTar
(HAX Fund)

87. KNOW-HOW
“Chinese factory
engineers master the
lost art of injection
molding.”
"Being on the factory
floor will help you solve
problems much faster,
Bunnie Huang
Hardware Hacker
Bunnie Studios
(HAX Mentor)

88. KNOW-HOW
“Chinese factory
engineers master the
lost art of injection
molding.”
”On the factory floor
you solve problems
much faster, speaking
Bunnie Huang
Hardware Hacker
Bunnie Studios
(HAX Mentor)

89. WHY GO TO CHINA EARLY?
• Prototype better & faster
–PCBs overnight
–All components you need
–Tools for prototyping
–Know how
–Design for manufacturing
–(much) Cheaper
Where is the mold?

90. COMPONENTS HEAVEN

91. CREATE WITH SHENZHEN:
AVIDBOTS
Making industrial cleaning smart

92. LONG-TERM BENEFITS
• Integrated supply chain
• Build and scale fast, from 1 to
millions
• Prepare scaling before it’s painful!

93. WHY APPLE IS (STILL) IN CHINA
• Speed
• Flexibility
• Know-how
• (still) Better prices

94. WHY WOULD A LAOBAN CARE?

95. FOUR-AND-A-HALF REASONS
1. Future business
2. Improve capabilities
3. Use excess capacity
4. Internationalize
4.5 Fun

96. FOUR-AND-A-HALF REASONS
1. Future business
2. Improve capabilities
3. Use excess capacity
4. Internationalize
4.5 Fun
The rest is up to you

97. 5.
FROM
SHANZHAI
TO STARTUPS

99. CHINA’S HARDWARE FUTURE
• Strengths
– Engineers & Scientists
– Manufacturing
– China market knowledge
• Needs
– Strategic Positioning
– Advisors & Mentors
– Self-promotion skills
– US market access

100. CHINA @ HAX
GROUP
STARTUP
S
NAMES DOMAIN
HAX 5 2
COMPANY 1
COMPANY 2
ROBOT
HEALTH
HAX 4 2
KAST
DARMA
3D PRINTER
HEALTH
HAX 3 1 VIGO WEARABLE
HAX 2 2
HEX
YEELINK
ROBOT
IOT
HAX 1 1 MAKEBLOCK EDUCATION

101. BENJAMIN@HAXLR8R.COM
WWW.SLIDESHARE.COM/HAXLR
8R
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