You set up a hardware accelerator program in China, called Haxlr8r, for ‘people who hack hardware and make things.’
Cyril Ebersweiler: I had never really made a difference between hardware and software, which was just pretty naive in fact. But because of that – I had joined a venture fund about 5 years ago – almost half of the batch in the first program ended up being hardware related startups. I thought it would be a walk in the park. That wasn’t the case – it was all over the place. Hardware was hard. So I figured early on: we need to build a framework around this, because there are more and more people who build hardware.
What were some of the initial challenges that you faced?
Cyril Ebersweiler: We are still facing challenges today. But a key point was to understand the landscape for building a physical product. There was no real source of data available to understand this. There had to be a first wave of hardware startups that had to demystify things. You can refer to manufacturing books and what not, but there was no real explanation about how things are made from A to Z or why they are built the way they are. So there had to be a first wave of hardware startups that went through our program which had to demystify things.
Do you think it is essential for a hardware startup to go through an accelerator program? What will the founders take away?
Cyril Ebersweiler: This might sound weird, but we are not an accelerator per se. The longer we’ve been running the program, the more we realize that we do a lot more things than a traditional accelerator would. Most people think we are here for manufacturing. Actually that’s not the case. For us it’s always about the company – it’s not about the products. The first thing that happens here in the program is that we position the products to make sure the startups are addressing the right market. And the main reason we are here is because of the prototyping and the supply chain. You can pull that off much faster here in China.
So do startups need to go through an accelerator? It depends on their experience. It depends on whether they are trying to create a product or a company. For us it’s always about the company – it’s not about the products.
…so your distinction is: you work with early stage startups that are still in the prototyping phase?
Cyril Ebersweiler: Yes, we are pre-Kickstarter – if that makes sense. We work at the vision level first. Once we have made sure that their product correlates with their vision, we iterate on the prototype.
Cyril Ebersweiler: If there is one reason we are here in Shenzhen, it’s that it really is the best place for rapid prototyping. But I cannot even claim I realized this before building the program. After the first batch of startups, I was talking to my partner Zach [Hoeken Smith; Co-founder of MakerBot] and told him that I think Shenzen is the only place for us to be. I remember Zach responded, “I’m so glad you get it. I can’t discuss this with anybody, because people think it’s crazy.”
Is there a big cultural barrier for European or U.S. startups that come to China?
Cyril Ebersweiler: It used to be terrible for startups to turn up in Shenzhen. There is no other word for it. It’s getting a whole lot better though. I first came to Shenzhen around 18 years ago and it was just one of the worst places on the planet. Today it is very high tech and all the factories have actually been put outside the city. And most of the factories now have English speakers. It’s still far from being perfect and it’s not easy at all, but it’s much better than what it used to be.
And you help the founders not only to make the right connections but also adapt on a personal level…
Cyril Ebersweiler: … We have crash courses in the first months including a cultural crash course to make sure people don’t feel like a fish out of water. There is a big round of adaption needed, where staff help out with day-to-day things, but also with things like taking the teams to factories and teaching them the rules. We have cultural crash courses to make sure people don’t feel like a fish out of water. Rule number 1 for our startups is to know the factory owner. If you don’t have a good relationship with and have direct access to the factory owner, you better forget it – you can stop right there.The goal of the program is for people to create their own supply chain and own their relationships. We are not here to be a layer between them and the factories. It’s really to about giving all the knowledge and all the power to the startups.
Is there a typical day for startups at Haxlr8r?
Cyril Ebersweiler: There is at least one part of the day where people are out of the office – visiting factories or going to [electronics] markets to buy new parts for their prototypes. At least every other day the founders will have a mentor 1-on-1. Generally the biz dev guys will build a database to make sure the features are right for the product. On the engineering side, they will keep building prototypes and visit factories until they have a manufacturable prototype.
Marc Andreessen famously said, “It’s is called hardware for a reason – it’s hard.” Do you think hardware is still as hard as a lot of people in the industry say it is?
Cyril Ebersweiler: It is. The longer we are at it, the more we realize how hard it actually is. I think the hardship actually comes from the sheer amount of work that a small team has to do. It goes way beyond what we thought was the end game – the manufacturing. Initially we thought now that you have a product that some people want, all we have to help you do is scale up, take it to stores and everything will be awesome. Actually just to get to that point takes a lot of time and resources. You are really not out of the woods for quite a while and at the same time you have to juggle hundreds of different topics that you generally have no clue about.
So this is why you are building this platform.
Cyril Ebersweiler: Exactly – to demystify some of the processes. We have realized that a lot of the struggles are simply caused by lack of anticipation. People get crushed because they don’t do what should be next on their agenda. People get crushed because they don’t do what should be next on their agenda. If we can help figuring out what’s next – standardizing the process – well, the survival rate would drastically increase.
For a startup going into hardware, what key lesson would you like to pass on.
Cyril Ebersweiler: I talked about 5 lessons we learned during my ‘Lean Hardware’ keynote at Pioneers Festival, so let me choose a different one: Branding is really important.
There is a famous saying from a great TED talk, “people don’t buy what you do, they buy why you do it.” So the story you sell is essential. And until your product is inside of the store you are still selling a story. You could be selling a story for a long time [laughs] – it could be a year, it could be two years. So being masterful at marketing and branding is essential for survival.
There have been a lot of inventors, tinkerers and makers in the history of mankind. Which pioneer would you like to bring back to life and why?
Cyril Ebersweiler: That’s an easy one: Da Vinci. Why? Come on, it’s Da Vinci. [laughs]