Working with hardware can be hard, but it doesn’t mean you can’t succeed. Thankfully, there are strategies you can take to ensure that your hardware startup can grow sustainably.
1.Offering services (and software) is arguably the easiest way to hold on to your customers
One of the most successful hardware companies integrates services like iTunes and iCloud across multiple platforms to increase switching costs.
Dell, in its heyday, used customisation and superior customer service to attract both retail and business customers.
Current trends among IoT hardware startups should look into this as a key strategy.
2. Catering to a specific niche audience can discourage potential competitors
Amazon, Quidsi, and Zappos are great ecommerce examples of being able to scale by focusing on very niche consumer products: books, diapers, and shoes, respectively. Some recent hardware startup examples include GoPro, 3D Robotics, and Nest.
3. Building a strong, formidable brand can heavily influence consumer preference and create customer loyalty
Besides AAPL, other brilliantly marketed hardware companies include Intel, Cisco, Nintendo, Beats by Dr. Dre, and Dyson.
The “fashion and apparel” and “food and beverage” industries, where branding plays up to a 95% role in customer purchase decisions, are excellent case studies in creating a strong brand.
4. Implementing an innovative revenue model can get your customers coming back for more.
The traditional relationship between the consumer and supplier is a pay-per-product transaction.
However, proven and popular models also include hardware-as-a-service (leasing) like Xerox printers and hardware-as-a-platform like mobile phones and video game consoles.
A clever off-shoot of the hardware-as-a-service model is the pay-for-uptime model from Amazon Web Services and Rolls Royce jet engines.
This is an excerpt from Tech in Asia. You can read the full article here.