In this episode of Startup School Radio, host Aaron Harris started by sitting down with Luke Iseman, who specializes in advising hardware startups at Y Combinator.
Later in the episode Harris interviewed Philip Winter, the co-founder and CEO of Nebia, the company that launched out of YC's Summer 2015 class with a new kind of showerhead that promises to dramatically improve the shower experience while also cutting down water use by 70 percent.
One especially interesting part of the episode was hearing Luke discuss how hardware startups should weigh the advice they receive from investors and advisors against the feedback they hear from users:
Luke Iseman : If a startup's not building a brand, they're a commodity. And if they're a commodity, frankly... we should not be trying to turn them into a high-growth startup, because commodities are not high-growth startups.
Aaron Harris : I guess that's true when there's no underlying intellectual property or [technical] advance in what they're doing. But you're not a commodity if no one can replicate you.
Luke Iseman : Agreed. So some B2B things, some hard science things. Definitely. I agree, those would be an exception.
Aaron Harris : But pretty much everything else can be copied.
Luke Iseman : Exactly. If it's consumer-facing, it has to be a brand. Otherwise, you're playing a game that is not particularly fun, which is, "How cheaply can I make this compared to the guys who live next to their factory in China?" You're not going to win that game. And it's no fun. You should avoid playing it, and instead create something beautiful that people want [so much] they won't care whether it's $200 or $290, because it's an object of desire.
Aaron Harris : So if you're talking to a founder who's just getting started with their hardware company, and they say, "Okay, look, we built this thing. It works." Do you look at that and say, "It works, but it's not beautiful," or "It works, but I don't see it building into a brand." Is that factoring into your decisions?
Luke Iseman : No. Because I consider myself to have little enough taste in brands that I'd just tell them to show it to a bunch of people. And increasingly that comes with a disclaimer, like, "Take anything that I or any other investor/advisor tells you with a giant grain of salt. And put double weight on anything that a potential user of your product says to you."
...I think everyone needs to remember that this is the Wild West. [That goes for] startups in general, but particularly hardware startups. This is not well-explored territory with standard rules. There are best practices, many of them written by our alumni, but it's still the Wild West. So, more than anything, companies should experiment with different approaches.