SAN JOSE, Calif. – Got a cool idea for a connected device? Plenty of hardware accelerators want to help you create and ship your product faster and for less money than ever.
The proposition is simple, though details vary significantly. Startups get several thousand dollars, a work space often with a shop, mentors and connections to factories usually in China to help them turn an idea into a working prototype ready for volume manufacturing and first-round funding. In return, the accelerators typically take 5% to 10% equity.
“We can take any product to market with $100,000 with the system we have in place — you don’t have to raise millions to be a successful startup anymore,” said Cyril Ebersweiler, founder of Shanghai’s Chinaccelerator in 2009 and Shenzhen’s Haxlr8r in 2011. “In Shenzhen, we get things faster and cheaper… and speed equals money,” said Ebersweiler who aims to get his startups shipping products in 6 to 12 months.
A handful of well-known hardware incubators in tech hubs like San Francisco, Shenzhen, and Boston have inspired dozens of others now cropping up in less likely locales from Milwaukee and Memphis to Cairo and Tartu, Estonia. Their freewheeling, fast-moving culture is already taking root in accelerators part of or partnered with corporations from Flextronics to Ford, Foxconn, and the Mayo Clinic.
As one gauge of the number of incubators out there, the Global Accelerator Network has more than 50 members worldwide, more than a dozen focused on hardware.
Choosing which one to work with can be tricky. Each one has slightly different terms, sets of mentors, and manufacturing and financing connections. Some participate in funding rounds or have parent companies who do, others just maintain loose affiliations with outside investors.
So far, few provide much help with one of the big issues hardware startups face – getting your new product on retail shelves. One warning: most seem to take a somewhat cavalier attitude to intellectual property.
The hardware accelerators are essentially offshoots of successful incubators such as YCombinator and TechStars that have no specific focus, but tend to be oriented to Web software startups. Their factory is Amazon Web Services where anyone with an idea for a service can deploy it cheaply. Imitating their success in the mega-factory that is China Inc. was just one of several factors that spawned the rise of hardware focused-accelerators.
Among other factors, one of the biggest is the buzz around the Internet of Things as the next big thing beyond mobile.
“There will be an explosion of devices coming, objects… with the power of mobile phones inside them,” Ebersweiler said. “You need to rethink everything — That’s why it’s exciting to be in this space,” he said.
Crowdfunding sites also played a role in creating demand for the accelerators. They are easing pains felt by several IoT startups that came up with an idea for great gadget, pre-sold it to thousands of would-be buyers on Kickstarter and Indiegogo, then couldn’t get it made in time or on budget.
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