Startups share a joint mission of creating a positive impact globally through their software and/or hardware solutions. However, to achieve the impact that startups aim to achieve, they must set up an effective sales & marketing organization to successfully introduce their product to the market. Often, this requires more effort when selling a hardware solution. However, when done well, selling hardware can be very profitable. This is where Bianca van Dulmen, venture partner and sales expert at FORWARD.one, comes in. With her extensive experience, she assists our startups in setting up scalable sales & marketing processes. In this article, she highlights what it takes to sell hardware successfully.
You might have heard the phrase, 'Hardware is called hardware because it is hard to sell and scale.' This explains why the hardware industry gets notoriously fewer VC investments than software companies, despite their very high scaling potential. Let's examine why many think hardware is hard work. Software attracts recurring revenue with subscription models, whereas hardware is often a one-time purchase. Furthermore, profit margins might vary due to differences in cost, as software production costs are often lower after initial development. In contrast, hardware requires suppliers, storage, and shipping.
Similarly, selling hardware might demand more time, money, and effort to educate customers about the product and its specs. Bianca explains: "One of our portfolio companies is Optics11 Life, which sells fiber optic testing equipment to academia and pharmaceuticals. While assisting them, I have seen that customers require deep technical information before buying." The potential customer often requests an on-site demo, requiring actual analysis data. But that shouldn’t be a showstopper, explains Bianca. She advises setting up a sales system that accounts for all phases. Bianca emphasizes: "If your pipeline is set up to include all the phases of customer adoption, you can set weights and probabilities to give you a more accurate indication of current and future performance."
So, do you need to work harder to sell hardware? "Not necessarily," says Bianca. "While selling a physical product may take more effort, the sales process is similar to that of a software company. In both cases, it's about finding that sweet spot of value for customers." If you find that, hardware can be scalable, profitable, and impactful. Take, for example, ASML or NVIDIA. If you have a strong value proposition in a large market and a solid sales process, a hardware company can be equally successful as some of the best software companies out there.
What helps most find the sweet spot of value and start selling innovative products to improve the world? Bianca: "Having a commercial person on their team from the moment there is an MVP (minimum viable product) is a must for early-stage tech startups.”
This person could be a part of the founding team, but deep tech startups often have more technical founders. In that case, Bianca recommends hiring an experienced salesperson with a proven track record, preferably early on, as they can help secure pilots and determine the go-to-market strategy. After the product goes to market and sales start to rise, they can hire and train younger talent within the company and help take the startup to the next level, especially when significant growth is expected.
Bianca explains: "Often startups look for what I call 'a sheep with five legs.' This is an exceptional person who is highly educated in a technical field and has the talent for commercial processes." While that may be the ideal situation, finding someone with this unique combination of knowledge and commercial insights takes a lot of time. Instead, it’s better to look for qualities that help to accelerate and scale quickly when needed. Bianca recommends: “The sales team needs to understand the problem your solution is solving and the value it brings to organizations. An experienced salesperson should have an affinity with the product but doesn’t need to understand all the specifics of the product. A technical person can help later to convince the technical decision-maker when required. Looking more toward sales experience is a convenient way to build a sales team designed to scale up quickly.
Bianca concludes:
In the end, what's most important is to start as early as possible with an experienced commercial person, so you build towards your vision from day one and can scale up quickly when you accelerate. At FORWARD.one, we see that this helps hardware startups on their path to profitability.
We at FORWARD.one are extremely happy with the support Bianca has given our startups until now. And it is clear that she has helped them see the joy in sales:
Bianca brings a wealth of expertise in Sales & Marketing, from both corporate SaaS environments as well as commercial roles within FORWARD.one’s diverse portfolio of hardware startups. As a technical founder, it’s crucial to get support on your commercial fundamentals when you start scaling up. Bianca helps you organise CRM, Go-To-Market, Inbound vs. Outbound, etc. with a never disappointing dose of energy and enthusiasm!
- Olivier Baas, CEO and founder of Villari
