Go-to-Market Strategies Hardware Startups Need to Adopt

At the Brinc Go To Market Bootcamp earlier this month, one of the first words of wisdom shared was that when it comes to distribution, you’re very likely going to be out of your depth as a first time hardware founder. In the words of one speaker: distributors, retailers and logistics providers can be sharks and you are very likely going to be eaten. For the most part, they have been in the business for a long time and subsequently the upper hand, have high demands, and can easily eat your baby seal pup of a startup alive with one seemingly harmless phrase in a contract or by squeezing your margins to deadly levels. And that’s if they even take your call and like what you’re selling.

It’s no secret there are a million ways to kill a startup. But the good news is when it comes to developing a go-to-market strategy for hardware, there is an established way of doing business. After all, moving physical products is an age old trade. As a first-time hardware founder the best thing you can do is to prepare in advance with strategy and direction for this next phase of your company’s growth.

Nail Your Positioning Before Thinking about Distribution and Retail

Distribution, particularly through offline channels, was the biggest discussion point for the teams during the Bootcamp. Whether it was our own distribution expert Yasin Aboudaoud running a workshop, retail buyer turned distro guru Yohan Jacob of Retailbound sharing the retailer’s perspective or Jonathan Tam of Nanoleaf who shared his experience, the same theme kept coming up: positioning.

Wait, we’re talking about distribution here, right?

Yep. But the advice all around was to give time to your company’s positioning before you pick up the phone or write a single email to a retail buyer or distributor. If you haven’t done any positioning work yet, this is the time to do it. If you’ve already gone through some positioning work, take some time to give it or your team a refresh. There are many helpful exercises to hone your positioning to help make the process faster and more focused.

Having clarity on your positioning will inform your overall distribution and retail strategy, making sense of what can seem like an overwhelming landscape and process. This boils down to what distribution channels are you going to tackle first and why, and what the roadmap looks like for the next year or so.

Most IoT products can fit across at least two categories — consumer electronics and something else: art and design, home furnishings, health and wellness, sports and so on. Then layer on top of this whether it’s a high end or mass market product. Where you sell your product will also impact your positioning whether you mean to or not. The influencing forces on positioning stack up quickly. Some you can control and some you can’t. The goal is to control as much of the positioning forces that are within your control, including where you distribute your product.

For example, let’s say you’re selling a connected mirror. Putting your product on the shelves of a big box store like Home Depot may seem like an incredible opportunity. It’s a huge store after all with many retail points. Whether you intended it or not, by selling in this store your product will be seen as a functional, mass market device. If you are actually positioning yourself as an art and design product because you’re seeing better conversion with that audience, then smaller retailers may be more successful for your product as you work to build your brand.

Owning your positioning before hitting retail will allow you to own your strategy more successfully for distribution roll out.

Prep for Retail Buyers and Distributors like you would for an Investor Pitch

Once you’ve determined your positioning and mapped out your distribution and retail roadmap, it’s time to start talking to retail buyers and distributors.

The process of pitching to retailers and distributors shares some similarities with the fundraising process. In both cases you are working to sell your vision to an external party, hoping they will take a chance on you and align for long term success. For investors it’s a risk of their time and money in exchange for equity; for retailers and distributors, it’s their reputation and time in exchange for margins on volume.

Just like when you’re fundraising, having a great product, team and brand helps when entering the distribution and retail world. Similarly, having high quality materials to help share your vision is key. When fundraising, this material is of course typically a one pager and pitch deck. For retailers and distributors, it’s the Buyers Guide.

Florian Simmendinger, co-founder and CEO of Soundbrenner (a Brinc portfolio company) shared the Buyers Guide that helped him get his first product into over 200 Guitar Center stores across the US. Usually under 20 pages, the Buyers Guide should of course show off your product, the specs and features, but also include:

• Company traction — Any pre-sales, sales or crowdfunding campaigns, awards and so on
• Customer service process and feedback/NPS score
• Packaging and a sample retail display example so they can picture what the product could look like in store
• Branding — Just like a pitch deck, making sure the Buyers Guide matches your brand and looks professional will go a long way to instil confidence

Bottom line: preparing for conversations with retailer buyers and distributors will not only increase your chances of success but also allow you to control the longer term trajectory of your brand. This may mean pumping the brakes a little — especially if you’ve been fielding calls from distributors since your crowdfunding campaign — to get your foundation and focus set.

Read the full recap of the first Brinc Go To Market Bootcamp here.