Hardware Business Models - Henry Obinugwu

Second talk of v1.2, the second Hackaday Hardware Lagos meetup held on the 30th of July, 2016.

Transcript

2.  Introduction (Hardware Business Models – Product Examples)  “Unconnected” Hardware Business Models  “Connected” Hardware Business Models  VNTS, Our Model & Go-To-Market Strategy  Going to Market? (Advice – If you like to hear word!)  Q&A
3.  Business Model (definition): a plan for the successful operation of a business, identifying sources of revenue, intended customer base, details of financing, going to market and succeeding. – Google. (Others: too much grammar, I couldn’t be stressed tbh)  A Hardware Business Model: the process of conceptualizing, prototyping/designing/developing hardware products with a plan for the…
5. Now we know the regular definition of hardware BMs. When it comes to open hardware, there’s no agreed definition. According to Patrick McNamara, the President of Open Hardware Foundation, ‘’Open Hardware is a physical artefact either electrical or mechanical whose design information is available to and is usable by the public in a way that allows anyone to make, modify, distribute and use that device.’’ This operates like the Open Software where the specs are available to anyone who can utilize it in anyway they like. Source: Technology Innovation Management Review, 2008
6.  “Unconnected” Hardware Business Models  Connected Hardware Business Models
7. Product: Apple iPhone 6S Pricing: From $685 Profit Margin: >65% Bottomline: If you’re going to make these, COP has to be really low, product be really unique, novel, and possess mass appeal  One off purchases  High Premium  Mass volumes for profit  Product Life-cycle typically 1-2yrs Source: Sydney Morning Herald, 2014
8.  Conventional one-off product purchase: NetPremise, Netgear, Lenovo, etc. + Build Your Own - DELL + Buy finished products from Large Distribution Retail Chains: Techno, Samsung, Lenovo + Buy Semi Finished - Arduino, Raspberry Pi + Buy Parts & Assemble
9. Product: Ring (remember to do effizy & play video) Pricing: From $199, $3/mo Cloud Recording Profit Margin: 30-35% One off purchase, High Premium - Monthly recurring extras for ancillary revenue - Longer product Life-cycle -
10.  Initial purchase, then cost either amortized over time or extra ancillary revenue coming from “optional services” + Hardware-as-a-Service: ; + Hardware-enabled Services: ; african example? + Consumables: ; Source: Ben Einstein, @BoltVC; 2015
11. Product Category: Unconnected Strategy:  Direct Marketing Approach  Social Media  eCommerce + Online Store + Mini Distributor + Mainstream eCommerce Platforms (Konga, Jumia)  Referrals
12. www.vntsonline.com ; 01-2900029
14. + What is Idea? USP? Practicability? + Market Survey? Feasibility Studies? + Business Model to utilize + Is it a connected Device? + What region do you plan to sell in? + If Africa/Nigeria, purchasing power, residual income? Total Addressable Market? Product easily understandable? + Requisite Skillset & Team to Develop? + Patents? Licenses? + Manufacturing Partners? + Prototype? + CONSIDER: NCC Type Approvals, SON + ENGAGE: THE TELCOS. DISTRIBUTORS. MAKE FRIENDS! + INVOLVE: Product Design/Marketing/Launch Experts
15. 1. Telcos 2. Major Distributors 3. Direct Consumer
16.  Capital Intensive  Specialized Skillset  Involves a lot of market research  Short Product Lifespan  High error margin  Price sensitive  Varying regulatory requirements  Heavily dependent on aggressive marketing  Overall success hinged on innovative USP
18.  http://wiki.p2pfoundation.net/Open_Source_Hardware _Business_Models  http://timreview.ca/article/136  http://www.slideshare.net/FedericoGiovanniRega/busin ess-model-canvas-definition-some-examples  http://timreview.ca/article/136  http://www.smh.com.au/digital-life/mobiles/apples- iphone-6-profit-margin-at-least-69-per-cent-report- 20140924-10ld37.html  https://blog.bolt.io/the-3-business-models-that- matter-for-connected-hardware-startups- 32fbf59506e5#.wsdwcpfso