C-Wheel enchantments: Why smart hardware is difficult to finance

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According to the relevant media not fully statistics, 2015 to complete the financing of the smart hardware company focused on a and B round, but can advance to the C-wheel less. The end-of-year inventory of smart hardware startups also showed that the main products, such as the more popular bracelet and smart home, had fallen sharply last year. Caught in the C-wheel magic spell of the smart hardware industry, after the hurricane, finally met their own bottleneck.

The C-wheel financing of smart hardware is difficult, in fact, is not the capital of the winter coming. After all, smart hardware is just starting, the future is unlimited, as long as the product is good enough, always favored by investors. The reason for this difficulty is that the product itself does not solve the consumer pain point, and lacks the ability to integrate the industrial chain.

Trapped in the C-wheel shackle intelligent hardware from birth to death

Smart hardware covers a wide range of areas, ranging from smart home, health care, to light bulbs and switches. Inject smart elements into traditional hardware and bring new vitality to it, enabling it to serve the public better. We can see that in the past two years, smart hardware with a new concept, won a lot of attention, the capital market favored object.

Last September, the automaker completed $500 million in financing, which was established at the end of 2014. Last May, DJI completed $75 million in financing. Following the completion of the 100 million yuan a round of financing in August 2014, the domestic intelligent projection industry star Enterprise Science and Technology last June completed the value of 300 million yuan strategic investment. After winning $10 million A in December 2014, the drone venture company billion completed a $42 million b round of financing last August. Last August, smart home Enterprise Orvibo completed 78 million RMB + round financing. Last January, with the small K smart socket brand well-known control technology to complete the 40 million RMB A round financing ...

Seemingly intelligent hardware development momentum is good, huge financing endless, but careful observation can be found: many of the financing occurred in 2014 or 2015, and concentrated in a round, B round, C round almost no. According to data, from 2014 until now, the completion of the angel turn to the A-round stage of intelligent hardware company more than 270, while the completion of the B-round of the company only 18. As of September 2015, the smart Hardware sector completed 106 financing, the angel turn to a round stage total of 92, and the C round only a stroke. In the C-round financing the shackles of intelligent hardware enterprises, ultimately only from the birth to death.

Difficult to find pain points, industrial chain difficult to integrate intelligent hardware problems emerge

At present, the completion of the Angels, Per-a, A-and even the B-round financing enterprises, many of these days almost disappeared. Even if they still exist, they face a lot of pressure, such as salary cuts, layoffs, slow product development recommendations, and long-range products. And the reason for the C-round financing difficulties and other problems, the key is that the intelligent hardware enterprises have not found the pain point of consumers.

Although they have drawn a smart hardware product of the good pie, but in fact, many products are just hanging smart gimmicks, with a few obscure features, for consumers is irrelevant, can only be itchy point-there is better, no it can. Can not solve the consumer pain point, can not form the situation just need, the product naturally has no appeal. Zhou Hongyi earlier on the current entrepreneurial more hot intelligent hardware entrepreneurs said, smart hardware must have pain points, only itch point absolutely not. Products in the market is not subject to attention and consumer welcome, investors do not see their future development prospects, naturally reluctant to continue to invest.

In addition, while the vast majority of smart hardware startups have innovative ideas that may be successful, they often lack the knowledge of smart hardware throughout the entire process of design, development, trial production, and mass manufacturing. If one of these links goes wrong, it's possible that the entire team will be hit hard. Among them, the most lack of intelligent hardware entrepreneurship team is the ability to integrate the industrial chain. Neither with upstream manufacturers to purchase empty spare parts capacity, there is no downstream terminal sales experience.

Even a lot of intelligent hardware Enterprise's products have not finished mass production, because the industrial chain problems caused the entire enterprise "dead." Many companies are starting with a small number of prototype products to test the market and consumer response. But they overlook a very real problem: a small amount of production and mass production is entirely two concepts. A small amount of production is easy to carefully polished, quality will have a certain degree of protection, and mass production is limited to the strength of the enterprise itself, often will not carry out strict production testing, resulting in a large area of product quality outbreak problem.

Under the double pressure of hard-to-find pain and poor integration of industrial chain, it is inevitable that intelligent hardware enterprises will not be "pampered" by investors. C-round financing, it seems to be a distant future.

Put down the financing of the demon, back to the original product smart hardware needs to slow down

Many intelligent hardware enterprises at the beginning of the establishment, is running to finance, the dream can be rich, with a product of the explosion to become the next millet. The anxious mood lets them unbalance of mentality, too attaches importance to the creativity, but ignores the creativity whether can solve the consumer the pain point, but also neglects the essential means and the strategy which realizes the creativity. The result of above his business is silently exiting the smart hardware industry.

To win the C-round financing, or to survive, smart hardware enterprises must put down the financing of the demons, back to the original intention. First, from the product end of the force, synchronization of the integration of the industrial chain. When the product run-in to a certain extent, then to seek financing. The pace of slowing down, in fact, is to go farther. (New discoveries of science and Technology, Constantine/Wen)

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C-Wheel enchantments: Why smart hardware is difficult to finance