Different Paths to Success for Tech vs Hardtech Startups

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Different Paths to Success for Tech vs Hardtech Startups

Having been lucky enough to invest in both tech (cloud, mobile, software) and “hardtech” (materials, cleantech, energy, life science) startups (and having also ran product at a mobile app startup), it has been striking to see how fundamentally different the paradigms that drive success in each are.

Whether knowingly or not, most successful tech startups over the last decade have followed a basic playbook:

This playbook appears deceptively simple but is very difficult to execute well. It works because for markets where “software is eating the world”:

In contrast, if you look at hardtech companies, a very different set of rules apply:

As a result, while there is no single playbook that works across all hardtech categories, the most successful hardtech startups tend to embody a few basic principles:

All of this isn’t to say that there aren’t similarities between successful startups in both categories — strong vision, thoughtful leadership, and success-oriented cultures are just some examples of common traits in both. Nor is it to denigrate one versus the other. But, practically speaking, investing or operating successfully in both requires very different guiding principles and speaks to the heart of why its relatively rare to see individuals and organizations who can cross over to do both.

Special thanks to Sophia Wang, Ryan Gilliam, and Kevin Lin Lee for reading an earlier draft and making this better!

Originally published at benjamintseng.com on February 25, 2019.

Different Paths to Success for Tech vs Hardtech Startups

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