
Barriers to Entry for Hardware Startups - roarden
https://blog.bolt.io/barriers-to-entry-your-hardware-startup-isn-t-thinking-about-870e18f4d8a4
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droithomme
OK, so obviously this is not really about barriers to entry for hardware
startups at all but is a puff piece written by a VC guy trying to promote
something a firm he invests in is trying to sell. No need therefore to discuss
actual barriers to entry for hardware startups (which are an interesting topic
not covered at all in his article).

Instead let's look at his product, which was his actual article goal, for
people to think about and discuss the product. It's a sort of plastic or
aluminum wine bottle that has a LCD touch screen on the side and wifi. We can
see exactly where this concept came from, it's the IoT model. Put wifi on
everything, and if its large enough, put a touch screen on it as well. Plus
some sensors, like the temperature sensor and a clock that pretty much costs
nothing to add since most embedded chips have a temperature sensor in there
already. So for each _thing_ in _everything_ : add wifi and touchscreens. At
some point _thing_ is wine since wine is part of _everything_. Thus this
product's provenance is in asking "What can we do by pairing a wine bottle
with wifi?" And so they answer this and make a product to answer that pairing.
The design process and reason for being has nothing whatsoever to do with what
anyone wants or would be or that would sell or be useful. It's about pairing
every conceivable preexisting product with wifi and touchscreens and forcing
them to do something, anything, and desperately hoping it will somehow catch
on, no matter whether it makes sense, no matter whether it addresses any real
problem or need.

~~~
dev1n
I know it gets over-referenced here on HN but the old Henry Ford "if I asked
people what they wanted they'd say a faster horse, not a car" quote is pretty
applicable here. This obviously doesn't make much sense to us, putting a wi-fi
chip on a wine bottle, but I'm sure people back in the 1900's didn't realize
why it was important to have a four-wheeled vehicle with an internal
combustion engine in it. I think we should be celebrating the fact that
technology has come so far that we can feed the data collected from a wine
bottle automatically to the computer in your pocket.

~~~
JamilD
This is more like asking for a horse with a shiny, touch-screen, IoT saddle.

~~~
techdragon
Except an IoT saddle could actually be useful because it could record horse
riding related metrics that could contribute to improving the health, fitness
and comfort of both horse and rider.

~~~
dooptroop
Except in the real world where said metrics wouldn't integrate meaningfully
with the dozens of other devices that collect similar "useful" data into their
own proprietary little gardens of infrastructure.

Obsolesence and device defects - I can imagine a saddle has a useful life of a
couple of decades.

What are you really going to measure here beyond GPS and accelerometer data?
The temperature and humidity of the saddle/horse interface? The strain and
weight on the saddle? That'll allow you to report useful stuff like "your
horse is tired and about to overheat", "you are to fat ride this horse", and
the ever popular "this saddle is the wrong size for current horse/rider combo,
please contact a sales representative". All the while taking in the views
through the new and improved augmented reality interface on your smartphone,
or hmd.

I mean why even have a horse at that point, it seems if you don't want to pick
up on the communication from the live animal your riding, why not get a mud-
bike.

~~~
techdragon
I never said "very useful". I just wanted to highlight how an otherwise throw
away idea might have some merit and wasn't the most stupid idea ever.

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ungzd
Most of products from these "disruptors" are nothing more than laughable.
"Changing the world" with electric wine bottle with proprietary bottles
inside? They complain about barriers to entry? They should be happy that
they're not locked in psychiatric clinic after these "inventions".

~~~
walrus01
"We've invented the wine bottle version of an inkjet cartridge or Keurig
plastic k-cup, give us money".

VCs: HERE HAVE SOME CASH

~~~
whorleater
To be fair, VC's aren't usually exactly after changing the world, they're
looking to invest in successful companies. Inkjet printers and Keurig have
been extremely successful, so you can't exactly fault VC's for funding the
wine version of it.

~~~
walrus01
Very true. I just don't think there's that much of a market for people who
want to drink half a bottle of wine and have the rest remain 'fresh'. The
average consumer is also becoming increasingly aware of how the razor-blade
sales model is bad for them.

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deutronium
I don't really drink wine, but couldn't you use something like
[https://www.amazon.co.uk/Vacu-Vin-Vacuum-Bottle-
Stoppers/dp/...](https://www.amazon.co.uk/Vacu-Vin-Vacuum-Bottle-
Stoppers/dp/B000GA3KCE/) instead of a proprietary bottle.

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Animats
A wine distribution startup. That's a "hardware startup?"

This fits the criticism that startups are focused on the problems of rich
people.

~~~
Panoramix
Yeah, I was expecting some aerospace or semiconductor tools, which typically
require hundreds of millions in investment before launching anything. That's a
real barrier.

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mannykannot
"Kuvée’s system hinges on an intelligent wine sleeve that keeps wine fresh for
30 days after opening."

Personally, I don't recall a need for anything over 30 hours, and dumb seems
to get the job done. I am sure there are others with less demanding
requirements.

~~~
gus_massa
Were are you from? Here in Argentina a bottle of wine usually last only a
dinner, in some cases until the next day (i.e. 12 or 24 hours). But I think
that in USA is more usual to drink just a little of wine before a big meal, so
the bottle may last more time.

~~~
garduque
USA checking in. No open bottle of wine in my house ever makes it to the next
calendar day. Sounds like I might enjoy Argentina.

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brandonmenc
The market for people who take more than a sitting or two to finish a bottle
of wine is probably very, very small.

The barrier here is, "bad idea."

~~~
Normal_gaussian
Or untapped market.

As a single guy I don't buy wine at all because I won't finish it in time -
not because I wouldn't enjoy a glass every few nights.

Though I can't see the expense of such an accessory being worth it to someone
who doesn't need to show off. It is possible to seal and cool it for pennies -
its just 'ugly'.

~~~
pyoung
Seems like a low tech solution to your problem is boxed wine. Trader Joe's
sells some good ones for ~$12 (and they hold the equivalent of 4 bottles of
wine).

[http://www.traderjoes.com/fearless-
flyer/article/2762](http://www.traderjoes.com/fearless-flyer/article/2762)

~~~
Normal_gaussian
Oh its not a problem. I just drink teas and whisky instead.

Would boxed wine really be a solution? The problem is of letting wine go to
waste - something I don't really care about for cheap wine. If I am going to
drink wine recreationally (not just to get drunk) I want to explore the full
range - which is not available boxed.

~~~
pyoung
Fair point. I am more into beer, so waste isn't as much of an issue (unless
it's a bomber of really high ABV stuff, in which case I just wait for the
weekend and/or when I am with someone to share). But I have found the TJ's
boxed stuff to be pretty good and it successfully fills the 'glass of wine
with dinner' need for me. I'd say stick with Whiskey!

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tclmeelmo
I'm unclear on how Kuvée fits into the three-tier system [0]. Are they trying
to supplement/replace the incumbent distributors, or are they in between the
vineyards and distributors?

[0] [https://en.wikipedia.org/wiki/Three-
tier_system_(alcohol_dis...](https://en.wikipedia.org/wiki/Three-
tier_system_\(alcohol_distribution\))

~~~
Animats
Amusingly, there's a large California company, Frank-Lin Distillers Products,
which has found a way to use the three-tier system in a profitable way.
Usually, there are distiller/bottlers, who make and bottle alcohol products,
distributors, who operate warehouses and fleets of trucks, and retailers. This
results in three levels of markup.

Frank-Lin buys ethanol in bulk, from industrial-scale distillers in the
Midwest. The ethanol is delivered in tank cars to the railroad sidings at
their plant in Fairfield. There, they take tap water, run it through a
deionizing plant to remove dissolved solids, mix it with ethanol, add
flavoring, bottle, and ship it out to retailers in their own trucks. Most of
the bottom-shelf booze on the West Coast, and some of the expensive stuff
(they used to make Skyy Vodka, until Campari bought out that brand) comes from
their plant. They make over a thousand different bottled products, but admit
that there are only about a hundred different recipes. There are still three
tiers, but the markup on ethanol when you buy it by the trainload is very low.

They use a huge number of different bottles, with elaborate designs and
labels. Their plant is conveniently located next to a Ball bottle
manufacturing plant. They have automated bottling lines which can switch from
one product and bottle to another without manual adjustments. This allows them
to feed customer illusions about liquor while keeping the manufacturing costs
low.

Frank-Lin is moving into wine production.They make "Maestri Chianti", which
has decent scores from wine snobs. Same concept, just different bottles and
flavoring. Who needs vineyards and wineries when you have an industrial plant
and the right formulas? Now that's disruption.

~~~
tclmeelmo
Fascinating! and mind-blowing to think about operations on that kind of scale.

Thanks for taking the time to share that.

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jimduk
OK, so here are my barriers (from painful experience)

a) Need to run a very multidisciplinary culture - electronics, product
design,brand, marketing, software, firmware, sourcing, manufacturing, dfm,
test, compliance, distribution,returns, cust service etc.

b) Need to synchronise the rhythms of delivery of these different disciplines
(no agile process for hard-tooling molds)

c) Need a defensible business model eg some software/ service/ brand component
so you don't just get copied

d) You need capital for your supply chain and partners. Volume matters,
sometimes you can't even get to the table without volume purchasing. NB you
need capital for your first 2 products.

e) The competition is really good (Apple,Sony etc.) The margins are small. The
business model is much worse than software or services. Many hardware
companies make their money on related services (phones, consoles, printers) so
customers don't realise what a 'fair' price is for a hardware item.

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jasonlaramburu
How does this company convince vineyards/wine distributors to adopt the
proprietary bottle?

~~~
maxerickson
One reason is mentioned in the incentivize stakeholders section. The vineyards
apparently get more money when they use the proprietary bottle.

I imagine that's better stated as the vineyard getting a higher percentage of
the retail price, but that's not a big difference.

edit: the same section mentions not using distributors (I guess they are doing
direct to consumer sales for now).

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pkaye
They could have done the whole thing without that outer bottle with the WiFi
enabled display. Just put a label on the metal bottle and be done with it.
Needless complications and expenses...

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compumike
I get where they're coming from. Locking consumers into a proprietary
consumables ecosystem looks good on paper. If you can pull it off (inkjet,
Keurig), it can be a big, valuable business. However, it rarely looks good to
consumers. That was important to us when we built
[https://www.pantelligent.com/](https://www.pantelligent.com/) \-- you
shouldn't have to get locked into something like Blue Apron just to make home
cooking higher quality, higher variety, and more convenient. You should be
able to go to your local supermarket, grab an ordinary $8 salmon fillet, and
have an extraordinary culinary experience.

------
blang
Discussed earlier:
[https://news.ycombinator.com/item?id=11377255](https://news.ycombinator.com/item?id=11377255)

