"Great Product – Everyone will want it in their homes!"
You have designed a product that everyone is excited about. Prototypes are built, focus groups are held, and countless hours of testing are completed. The verdict is clear: customers love it.
The next question is, what comes after that? How do you manufacture tens of thousands of units? How do you satisfy every customer expecting a high-quality product? How much will it cost, or more importantly, how many can you build with the cash you have available? Do you know when the product will be available to customers and in what quantities?
The talent that develops early prototypes and designs innovative products is not necessarily the same talent required to bring them to mass production and release them to the world. The real challenge becomes ensuring consistent production with high quality and strong process control, all while keeping costs under control.
The Path to High-Volume Manufacturing
Once a startup has a validated product, it faces two primary options for scaling production: manufacturing in-house or outsourcing through a contract manufacturer. The right decision depends largely on financial resources, available talent, and long-term goals.
Option 1: Manufacture In-House
Building manufacturing capabilities internally is a more demanding and less common path for startups. It requires substantial investment in skilled workers, equipment, real estate, systems, and technology. These capital requirements can be significant.
However, internal manufacturing offers a major advantage: direct communication between engineering and operations teams. This close cooperation facilitates better knowledge transfer, quicker response to design issues, and a stronger foundation for quality improvement.
Option 2: Partner with a Contract Manufacturer
Most hardware startups eventually turn to a contract manufacturer (CM) for production. A CM typically manages assembly, sourcing, supply chain operations, and quality control. They often lead much of the New Product Introduction (NPI) process and can even assist with design adjustments, distribution, and reverse logistics.
Some contract manufacturers provide vertically integrated services, producing components and subsystems internally. This level of support can accelerate time-to-market and reduce coordination complexity.
Agility and Process Discipline
One of a startup's greatest advantages—and biggest risks—is its flexibility. With few formal Standard Operating Procedures, startups can pivot quickly and make decisions without lengthy approval processes. This agility can drive innovation but can also introduce risks to product quality, performance, and logistics.
To balance speed with control, startups must design nimble yet disciplined processes. Rapid Engineering Change Orders (ECOs) and fast Root Cause Corrective Actions (RCCAs) are critical tools. These allow companies to address quality issues quickly and prevent field problems from escalating.
Focusing on Core Competencies
Hardware startups succeed when they concentrate on their core innovations while outsourcing complex or time-consuming aspects of production. Larger companies often struggle to adapt their established processes for new products. By contrast, startups can leverage a contract manufacturer that fits their size, stage, and product needs, allowing them to maintain focus on differentiation and customer experience.
Selecting the right manufacturing partner is critical. The decision should consider factors such as experience, size, core competencies, and proven quality systems.
Why "Hardware is Hard"
In software, competition is fierce and immediate. A new app can be wiped out by an operating system update or a larger competitor. In hardware, the barriers are different. Once a company reaches reliable mass production, it is already far ahead.
Scaling hardware is complex, expensive, and time-consuming. Building manufacturing infrastructure, developing a robust NPI process, implementing Design for Manufacturing principles, and creating reliable production lines all require significant investment. Yet, these barriers can also serve as protection, deterring competitors and establishing an early mover advantage.
As Ron Rubin, Managing Director of Boston Manufacturing Group, explains:
"For many small- to medium-size hardware companies, the dangers associated with the prototype-to-production phase is not related to competition, but rather, to self-inflicted wounds. To be sure, there are often regulatory and cost issues that must be understood and overcome, and burn rates that need to be carefully observed. The main barriers to success are the poor initial decisions made regarding the manufacturing process, due to a lack of experience with the specific manufacturing, quality control, and design-for-manufacturing issues for a new product. With a clear product focus, and proper investment in engineering and manufacturing capabilities, you will be way ahead of the curve."
Building the Right Manufacturing Foundation
Prototype development is exciting, but scaling production introduces an entirely new set of challenges. The best approach is to make deliberate investments in people, technology, and systems while selecting the right manufacturing partner.
For startups that choose to manufacture in-house, expert guidance becomes even more critical. Setting up production lines, establishing quality control systems, and managing costs all require specialized experience.
In either path—internal or outsourced—a well-structured manufacturing process can position a hardware startup months or even years ahead of its competition.