22 Main Pros and Cons of a Hardware StartUp

Startups are ubiquitous now as every other person wants to explore their competency, creativity and want to work independent of anyone’s orders. If you own a startup, you are your own boss and you can make decisions that would be considered ultimate for the company. This sense of power and freedom at one’s own workplace is what attracts and inspires thousands of people to go for a startup.

More and more people are attracted towards a startup that involves technology due to the increasing popularity of technology. Both software and hardware startups are very popular despite the disadvantages concerned.

Benefits of a hardware startupDrawbacks of a hardware startup
Tangible products are easier to saleRequires a lot of capital
No need of customizationRequires more testing 
Same product for everyoneTime consuming process
Easy to manageNeed to spend extra on packing
Easier to find marketBeing wrong is expensive
Competitive landscapeNo option to update
Stable marketInvolves higher risk
Long term customer trust
Downside protection


  • Tangible products are easier to sale:

People are naturally attracted toward things and goods that are tangible, that is things that they can feel, touch and see rather than products that can not be felt with senses or are not tangible. The physical goods have an appeal to customers that intangible goods cannot possibly match. All these features conform with hardware products, something that software products fall behind.

are tangible products easier to the sale
  • No need of customization:

Software products can be customized all the time according to the customer’s needs. Therefore, there goes more effort into each product in case of software goods. But in hardware, customers do not demand any customization and thus, once a hardware product is made, there need not be any alteration made to the product. A lot less effort goes into each hardware product.

  • Same product for everyone:

Quite unlike software products, hardware are products same for everyone. There can be no customization made in a hardware product based to individual customer demands. Thus, the company do not have spend extra on the design, something that would have happened if hardware products could be customized.

  • Easy to manage:

As the product distributed to every customer is identical, no matter how large the customer base, it becomes easier to manage the products and distribution of products. One need not worry if the product reaching the customer is exclusive to his demands as all the products are identical.it is easier to store, manage and distribute hardware products.

  • Easier to find market:

Software products can be customized according to the demand of each customer which is not possible in case of any hardware product. Any software company might thrive on the customized products while suffering from the illusion of having a market. In reality, the company might have no market as most people just want customized products instead of the original product. But when a product of any hardware company sells, they can know for sure that they have found the market as it is their original product that sells.

  • Competitive landscape:

The business landscape of a hardware company is much different from any software company. Designing and developing a hardware product takes a lot of time and effort. A lot of time passes even before a company can launch its product. So, the people who are already in the business can sense when a new competitor is coming to the business.

  • Stable market:

There can be no sudden emergence of any company in the hardware market. Building a hardware product and putting it out for sale is a very gradual and slow process. It involves designing, manufacturing, testing and many such processes. Thus, the market is very stable.

  • Long-term customer trust:

Investing in hardware products is expensive. Therefore, if a company can gain the customer’s trust by constantly delivering competent products, the customer will not easily shift to any other company, unlike software products where the customer could be switching between and using multiple products.

  • Downside protection:

What happens in software markets is that usually a single giant company gains monopoly in the market whereas other smaller software companies suffer from loss and are worth nothing. But as hardware products are tangible, you can still earn money from them.

does hardware startup have downside protection


  • Requires a lot of capital:

A hardware startup needs to produce tangible products which escalates the overall expense. This is because hardware product requires designing, developing, testing, producing and much more.

does hardware startup require large amount of capital
  • Requires more testing:

The production of any hardware product requires rampant testing on each step. The testing ensures the competency of the product and whether it is fit to be launched.

  • Time-consuming process:

The production of a hardware product is a time-consuming process as it requires to be tested over and over again. Even after that, there needs to be enough time to produce and certify the product.

is it time-consuming process
  • Need to spend extra on packing:

Like all other tangible products, hardware products also need to be packed in such a way they the products stay secure and are not damaged. This is the additional cost that hardware companies have to cover apart from the cost of the product.

  • Being wrong is expensive:

Once a hardware product is launched in the market, nothing can be done. If there is anything wrong will the products, the whole bunch needs to be retracted and the company has to face humongous loss.

  • Cannot update:

Unlike software products which can be updated even after being launched, nothing can be done about the hardware products. The hardware products need to be redesigned.

  • Involves higher risk:

A hardware startup involves higher risk than any software startup. The company needs to pay for every little mistake in the product and the expenses concerned is huge.

There are equal amount of advantages and disadvantages in case of a hardware startup. On one hand there is the guarantee of a steady market and on the other hand there is the risk of paying for every little mistake.

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