Lessons learned building my first hardware startup in the sustainability space
The highs, the lows, reframing failure and charging ahead.
Certified 100% human written. AI was not used - I promise.
In a previous post I got into the nitty gritty and story that lead me to launching a startup in the climate & sustainability space. For those that haven’t read it, the company - RoadPower - was focused on developing & commercializing road-based systems that recover otherwise-wasted energy from vehicles in motion, converts it into clean electricity, and supplies it to local use cases like electric vehicle chargers, nearby buildings, onsite battery storage, or exported to the grid. We raised some venture capital, developed our technology to the pilot stage, and deployed several customer pilots and demonstrations projects - but we ultimately couldn’t get the stars to align.
I highly encourage you to give it a read if you haven’t to get the full backstory.
In this post I wanted to highlight the specific lessons I learned from that invaluable, multi-year experience. My hope is that it could serve to help others on a similar trajectory and, if nothing else, entertain you in some way.
I believe that most, if not all, of these lessons could be applied to any startup, not just sustainability hardware startups.
So without further ado, the lessons (in no particular order) I took away from trying to launch my first startup:
Build a small-scale ‘MVP’ before a full-scale unit.
Before building a full-scale version of your product with all of the 'bells and whistles’ you should build a much simpler, minimally-viable and smaller-scale version of it. This is typically referred to in the startup world as an MVP. What is the minimum feature set/functionality that you believe your solution must demonstrate? And on how small of a scale can you build it that will still enable both technical related learning and meaningful feedback from potential customers?
At RoadPower we jumped the gun and developed a full-scale, feature-dense prototype prematurely. We should’ve started much smaller with a focus on acquiring real world technical and commercial data as soon as possible. We assumed the larger-scale prototype would be more impressive to potential investors, customers, partners - but we were wrong. We felt like we had to rush and build the full-scale unit in order to acquire early customers and raise a follow-on round of funding. This was the wrong approach.
Starting with a small scale MVP enables you to rapidly learn and refine your solution and focuses your efforts on the functionality that matters most to potential customers. Each subsequent version should be based on learnings from the previous one as you scale up to a full-sized, full-featured version of your technology. It’s much easier (and significantly cheaper) to make changes at the smaller-scale, especially when developing hardware solutions. Respect the engineering scale-up process. Don’t rush ahead.
Double down on validating technical feasibility early.
Before fully committing to developing your solution, and allocating engineering and financial resources to it, you should talk to as many engineers, scientists, and technologists about your ideas as possible. The more the better. Dont worry about them stealing your idea - they wont. Ask them to sign an NDA if you’re really worried. Focus on pushing them for raw honest feedback. Many will tell you that the idea is interesting, has merit and potentially even feasible but you need to push past that and dig into the details. Nobody wants to tell someone their baby is ugly. One way to get honest feedback is to mention that you’re not fully committed to the idea and are looking for ways to “prove it wrong”. If, for example, there’s something to your idea that’s physically impossible these conversations would help uncover that.
At RoadPower we didn’t have many in depth technical discovery conversations early on and when we did we didn’t really push for raw, honest feedback. Looking back we should have pushed them more around the physics of what we were trying to do (road-based energy harvesting). We had many technical assumptions that we were ultimately unable to validate and several of those conclusions could have been achieved much earlier with the right conversations. These kinds of conversations will be invaluable in setting you and your startup on the right development trajectory early.
Dont wait too long to build and test.
Don’t spend too much time dwelling trying to get the design perfect before building a prototype. As Reid Hoffman, the founder of LinkedIn has famously said, ‘if you’re not embarrassed by the first version of your product you waited too long to launch it.’
At RoadPower we (mainly I) obsessed over every little detail while developing our first, full-scale prototype. We ran all kinds of engineering calculations, built technical models and had long discussions around various features that were ultimately a waste of time at that stage. There’s really no substitute for building a prototype and testing when you have a fair level of technical conviction. You don't have to wait - you shouldn’t - for all of the traffic lights to be green before building. I suppose this advice can apply to lots of areas in life and business.
Get something built and tested in the most “MVP” way as soon as possible. Avoid perfection. Aim for good enough then get that sucker built! The stars wont ever all be fully aligned and if you try to wait for that you’ll have wasted one of your most valuable resources as a startup - time.
Trust your gut regarding conviction, passion for the business.
You should trust your gut regarding your conviction for the project. We’re given this innate ‘spidey sense’ also known as intuition and ignoring it can be detrimental. There are countless examples of people trusting their gut and being correct without really being able to fully explain it. We all have stories like this or know of them. If you’re constantly questioning or doubting what you’re working on, or the path you're on, its time to pause, take a step back and reassess. That intuition is based on lessons learned, knowledge, instinct and uncertainty. It’s your subconscious telling you that something just isn’t right. If you’re no longer interested, passionate or driven by the problem your solving or the solution you’re developing it may be time to pivot and go in anther direction.
At RoadPower I lost conviction in the solution we were developing. I had several doubts and concerns early on that ultimately ended up being the reasons we decided to wind the company down. These concerns should be take seriously and either validated or proven wrong as soon as possible. It’s been said that many of the reasons couples get divorced years later are for things they learned about their significant other in the first few dates. I think we can apply those lessons here. Pay attention to red flags early on and do something about them.
Be open to pivoting much sooner.
At RoadPower we didn’t pivot early enough even though we were getting all the signals to move on. As mentioned in the last section I lost conviction in what we were doing early on and some of the reasons for that ended up being why we shut the company down. One example involves the projected techno economics of our solution. I was concerned that the amount of revenue (from energy generation) our projects were expected to generate would not be enough for meaningful returns when factoring in both project development costs and ongoing expenses like O&M. The ultimate concern was that we couldn’t justify a venture-backable business with these relatively small expected project profit margins when factoring in worst case scenario assumptions. Our techno economic model was way too sensitive for things not to go perfect in all areas.
Looking back I think one of the reasons for not pivoting sooner was the sunk cost fallacy - the idea of having already invested so much time to give up. We didn’t come this far to only come this far, right? You ultimately need to know when to cut your losses and move on. This is much easier said than done. I think that just being aware of this and accepting that pivoting is the norm in the startup world can help here. Major companies pivoted as startups - it’s part of the game. Twitter was originally a podcast platform. Nintendo started by selling hand-painted playing cards. YouTube was originally a dating website! Our time is valuable. Reassess things when there is overwhelming doubt and concern and adjust course if necessary. Pivot or die.
Dont hire for the optics.
Make sure that the people you recruit, especially in the early days, are people that you truly want to work with. You’re going to be spending a significant amount of time with these people, likely more than with anyone else in your life. Do you see yourself working with this person day in and day out for many years? If you’re pretty sure the answer is ‘No’ then move on.
At RoadPower I made the mistake of recruiting individuals that looked good on paper. One of the driving factors here was the common startup knowledge that at the earliest stages investors are mainly focused on the team. I realized later that it was way less about the optics of the team than what you’re able to actually accomplish together. Traction as a team > Optics of a team. If the potential hire isn’t a hell yea, it should be a no - especially in the early days when the core team and first batch of employees are coming together and the culture is getting established. Don’t hire for the experience and optics only. Make sure they are a great fit with your personality, values, and company culture. The old adage ‘hire slow, fire fast’ applies here. The team chemistry really matters.
Talk to lots of potential customers and partners.
Before investing a significant amount of time and resources into developing your product focus on speaking to as many potential customers as possible. You ultimately want to make sure that: 1) you’re solving a real problem, 2) this problem ranks high in importance for them, 3) your product solves it much better than what they’re currently using to solve it, 4) they're willing to pay for it, and 5) there are enough of these kinds of potential customers to justify a large market opportunity.
You want to ensure that youre developing a solution to a validated problem/pain point. Don’t fall into the trap of building a “solution” and then looking for a problem. This is particularly hard for inventors and engineers. Builders want to build things they find interesting. Thats all fine and dandy. I fall into that camp myself but if your goal is to start a business you really need to ensure you're first focused on solving the problem and then developing/experimenting with various solutions to that problem. Fall in love with the problem. Don’t be married to your solution.
Talking to as many potential customers, partners and others within the greater ecosystem will help you navigate through this discovery process of validating market pain points and potential opportunities ahead of developing a solution.
I also think it’s worth mentioning here not to be stealth. As already mentioned, nobody is going to steal your idea. I worried about this for far too long. You should be talking to as many people and potential stakeholders in your world as possible. Show off your MVP, share mockups, do product demos, share wins and losses, build in public, etc. The feedback you’ll get will be invaluable.
Spend more time on assessing prior art and previous attempts.
You should deeply reconsider pursuing something if its been done before and was unsuccessful. This isn’t to say to avoid it, just to meaningfully reconsider. This is even more true when there’s lots of prior art (e.g. patents, research papers, etc.) and/or several companies that have attempted something similar but ultimately ended up pivoting or going out of business. If you do decide to continue pursuing your product concept you need to be absolutely sure that you’re solving something that previous teams were unable to.
Before starting RoadPower we were aware of numerous prior attempts at developing and/or commercializing road-based energy harvesting systems. We made our own assumptions around why these previous attempts were unsuccessful and came up with reasons why we would be the team to overcome those challenges. Our mistake was neglecting to validate those assumptions early on and prior to investing a significant amount of resources into the development and commercialization of our technology.
We should’ve spent a lot more time and effort upfront reviewing all the prior art we could find, and talking to those who’ve tried and failed to accomplish what we were setting out to do. We likely could’ve validated a number of assumptions through having these conversations and digging deeper into the details of previous attempts.
You also need to ask yourself: If our product could’ve more/less been done before then why hasn’t it? What are we doing differently from previous attempts? Why are we the team to figure this out? And why is the timing right now for this business to succeed?
The honeymoon period of passion and excitement won’t last.
The early drive, passion and motivation around your startup, the problem you’re going after and the solution you’re developing will wax and wane. That early optimism and excitement is short lived once things start to get difficult and messy. To sustain momentum through these “bad times” there needs to be a deep underlying passion and mission that transcends the difficulty and overwhelm. In the beginning, your startup concept was shiny and new but in short order it became dirty, covered in blood, sweat and tears and doesn’t look or smell as nice when you’re up close with it in the trenches. To avoid this trap you need to really care about the problem and be maniacally driven to solve it in the most optimal way possible.
At RoadPower I wasn’t passionate about road-based energy harvesting enough to sustain my motivation and drive through the difficult times, especially when I was loosing conviction in what we were building. I wasn’t obsessed with the problem we were solving.
You need to anticipate that your initial enthusiasm, motivation and drive will be challenged when things get hard. This is normal. Don’t let it be the sole reason for loosing conviction, pivoting, etc. And dont get distracted by other shiny new objects. The grass isn’t greener on the other side. Remember why you’re doing this and tap into that reason whenever you need to.
Don’t conflate customer interest with market validation.
As mentioned previously, nobody wants to tell someone their baby is ugly. This applies to early potential customer interviews and the feedback you’ll get from them. Many of the people you’ll tell your idea to will tell you that it’s a great idea, its genius, that if it existed they’d use it, etc. It’s much easier for them to provide that kind of feedback than telling you you’re idea sucks. Whats important here is that you dont take this fluffy feedback as definitive market validation. This could be false traction and, if relied upon, will likely set your company off on the wrong trajectory. Take this kind of feedback with a grain of salt.
At RoadPower, mostly everyone we spoke with said that what we were building was really cool, makes sense and should exist in the world. The problem was that almost none of this feedback was backed by any meaningful level of commitment (e.g pre-purchases, letters of intent, pilot agreements, etc.). The highest level of market validation we received we're a handful of signed letters of support and LOI’s for future unpaid pilots. And thats where we stopped. We took that as definitive market validation and never got the chance to revisit that discovery process.
Instead of coming out of the gate talking about your product, how it works and how it will change their life instead ask questions related to their pain points, priorities, how they're currently solving the problem you’re assuming they have, etc. The purpose of these discovery conversations is to see if your product fits into their hierarchy of problems, priorities and needs without trying to sell them what you’ve built. Their responses to those kinds of questions are an order of magnitude more valuable than their compliments on your “really cool” product idea.
Focus on non-dilutive funding wherever possible.
Investors don’t want to fund science experiments. They want to pour gasoline on a fire and help you scale up the early commercial traction you’ve already demonstrated. Investors typically don’t want to fund the first round of R&D and technology validation. They like to invest in technologies that are past the proof-of-concept (PoC) phase and are somewhat proven and de-risked. And the more complicated the tech the more this applies. Most VC’s don't have engineers and scientists on staff to assess the deep technical merits of what you’re building. They like to get involved once its been established that the technology you are setting out to develop can actually be built and you’re the team to do it. Very early-stage, pre PoC deep tech should be funded with non-dilutive capital like grants wherever possible. The fact that you received grant funding for R&D is actually a major technology proof point for investors. Other examples of non-dilutive funding could come from strategic partnerships, technology fellowships, etc.
At RoadPower we really had no business raising money from VCs. Despite raising from multiple investors, we were still very much in the R&D phase and had a number of technical assumptions to validate and things to de-risk. Early stage VCs that invest at the pre-seed stage will take more technology risk than later stage VCs but still like to get involved post proof-of-concept. In our case, we got really lucky in raising equity funding that early. I believe we were the exception to the rule here. We should have doubled down on trying to secure non-dilutive grant funding early on. This would’ve enabled us to focus more on the technology, dial things in and de-risk some of the major engineering concerns.
If the tech survives the R&D grant process, and meaningfully demonstrates ability to be a solution to market pain points you’ve previously identified and validated via various forms of traction, then you go out and raise VC funding.
Learn to delegate.
You cant do everything. I repeat. You cant, and should not try, to do everything. One person can only do so many things effectively. You don’t want to get spread too thin. Thats a recipe for being ineffective across several areas. Early on its really hard to avoid this because you’re still trying to prove things out prior to staffing up. But as soon as you possibly could you should delegate to others. One of the big mistakes I made as CEO at RoadPower was that I thought I needed to get into the weeds on everything including the code in our control system. By day I was welding in the work shop and by night I was balancing our books. I’d go from an investor pitch meeting into the machine shop to fabricate a custom part for our prototype. The constant task switching was overwhelming and really slowed us down. I felt like I had no choice, but looking back theres a number of things I could’ve and should've delegated. I could’ve hired a virtual assistant for administrative tasks. I could’ve hired a fabrication ‘gun-for-hire’ to do some of the low-level prototype fabrication work. I could've put more trust in our Director of Engineering to manage technical projects and drive the development of our technology. There’s also a bunch of things that I did that probably shouldn’t have been done at all. Lots of busy work to feel productive that didn’t really move the needle. These kinds of tasks should’ve been delegated to the trash bin.
And finally - Don’t identify w/ the failure.
It’s only truly a failure if you didn’t learn from it. Even if you feel like you didn’t learn anything, I can assure you that if you really spent the time and thought about it, you can find a few meaningful lessons you can bring with you to your next venture. That was my goal of writing this post - to aggregate all of the lessons I learned from “failing”.
Without failure theres no growth. This is no more apparent than in the gym. Without training to failure and finding your limits there is no muscle growth. Failure means you found your limits. Ideally it means you learned a ton and have expanded your comfort zone and tool kit. Its important to reframe failure as an invaluable learning experience and jumping-off point for continued growth.
Thanks for reading! Let me know what you think in the comments.
-RM
As a former startup founder myself I can relate to all of these. Very well said.
-Matt