They say 94% of hardware products fail to reach market. Of those that succeed, 75% miss their original launch date.
And the main reason? Not understanding the true complexity of hardware development from the start.
These aren’t just numbers. They represent thousands of innovative ideas that never made it to market because their teams didn’t have the right expertise at the right time.
The good news? Most of these failures were preventable.
Intro
Hardware product development advice often conflicts. Build in-house or outsource? Focus on design or manufacturing?
With over 30 products spanning consumer, industrial, and enterprise products, we’ve learned what matters most: understanding the complete development landscape before you begin.
Whether you’re a funded startup, or an established company, this guide will help you navigate the complexities of product development:
- Hardware Development Landscape: Understanding the core elements and challenges
– What makes hardware development unique
– Why is hardware development so challenging?
– How has connectivity changed hardware? - Core Engineering Disciplines: Essential expertise for successful development
– Mechanical Engineering: The Physical Foundation
– Electronics & Hardware: Bringing Products to Life
– Firmware & Embedded Systems: The Brain of the Operation
– Software & Integration: Creating the User Connection
– Industrial Design & User Experience: Making Complex Products Simple - System Integration Challenges: How different components work together
– Understanding the Full Picture
– The Three Critical Layers
– Building for Success - Common Pitfalls and Solutions: Avoid costly mistakes in your development journey
– Overlooking Design Complexity
– Neglecting Supply Chain Redundancy
– Rushing into Certification
– Manufacturing: The Reality Check - When to Partner vs. Build In-House: Making the right development decisions
– Internal Development Teams
– Development Partners
– Making an Informed Decision
– The Hybrid Approach
Hardware Development Landscape
What makes hardware development unique?
Hardware development combines physical and digital challenges in ways software never faces. When you’re building hardware, you often can’t push an update – you need to get it right before manufacturing.
Consider a smart thermostat. It needs:
- Reliable temperature sensors
- Power management systems
- Wireless connectivity
- User interface controls
- Cloud integration
- Mobile app control
Each element must work together seamlessly, and problems in one area affect everything else. Unlike software, hardware issues can’t be fixed (for the most part) with a simple update once the product ships.
Why is hardware development so challenging?
Hardware development is complex because it typically requires software development on top of hardware development. Since many modern hardware products rely on software to function, developers must create both components rather than choosing between them.
Physical Constraints:
- Components must fit in specific spaces
- Power consumption limits
- Heat management requirements
- Manufacturing tolerances
Integration Challenges:
- Multiple engineering disciplines
- Component compatibility
- Supply chain dependencies
- Certification requirements
Cost Implications:
- Tooling investments
- Minimum order quantities
- Testing equipment
- Certification costs
How has connectivity changed hardware?
Modern hardware products need to do more than just work – they need to connect. This creates new requirements:
- Secure data transmission to protect user information
- Over-the-air updates for features and fixes
- Cloud infrastructure to handle data
- Mobile apps for user control
- APIs for third-party integration
Hardware teams now need cloud computing, security, and mobile development expertise alongside traditional engineering skills. Connectivity has made hardware more capable, but also much more complex.
Download our free Product Requirements Document (PRD) Template to capture and organize your product's critical requirements.
Core Engineering Disciplines in Hardware Development
Modern hardware products demand expertise across multiple engineering disciplines. Each plays a crucial role in transforming ideas into market-ready products. Let’s explore these core disciplines and understand how they work together.
Mechanical Engineering: The Physical Foundation
Mechanical engineering forms the backbone of any hardware product. It’s not just about making things fit together – it’s about creating products that can be manufactured reliably and cost-effectively.
Mechanical engineers focus on:
- Developing precise mechanical systems to ensure functionality
- Selecting and optimizing materials for performance and cost
- Creating thermal management systems for reliable operation
- Validating structural integrity through analysis and testing
- Designing for manufacturing (DFM) to ensure products can be built efficiently
- Optimizing manufacture and assembly processes
In our custom vending machine project, mechanical engineering was critical for reliable dispensing. The system needed to handle different candy sizes and weights while maintaining precise portion control – all while being cost-effective to manufacture.
Electronics & Hardware: Bringing Products to Life
Electronics transform static mechanical assemblies into smart, responsive products. This discipline requires deep understanding of both analog and digital systems.
Key areas of focus include:
- Circuit design and simulation to validate concepts early
- Power management for optimal battery life or efficiency
- Strategic component selection considering cost and availability
- PCB layout optimization for manufacturing
- Signal integrity for reliable operation
- EMC compliance for regulatory requirements
With Otto’s home automation products, electronics engineering balanced power efficiency with reliable wireless communication – essential for products that need to operate flawlessly for years.
Firmware & Embedded Systems: The Brain of the Operation
Firmware is the crucial link between hardware and software. It’s the code that directly controls your product’s hardware, and it needs to be both efficient and reliable.
This includes:
- Real-time operating system implementation
- Hardware driver development
- Communication protocol management
- Power consumption optimization
- Performance tuning for responsiveness
- Secure over-the-air update systems
Most of our projects include some sort of firmware to enable smart functionality. Whether it is a vibrating alarm, IoT sensors, or smart home devices.
Software & Integration: Creating the User Connection
Software transforms hardware capabilities into rich human experiences. In today’s connected world, software is often essential for creating a complete product experience.
Core software elements include:
- Mobile app enabled functionality or analysis
- Cloud infrastructure for data management
- API design for third-party integration
- Secure data handling
- Performance optimization
Products that integrate into an existing ecosystem like our People Counters focus on API integration, while commercial software like our AI quote review and proposal generator for Gover.
Industrial Design & User Experience: Making Complex Products Simple
While technical excellence is fundamental, successful products also require thoughtful design and user experience. This is where industrial design and UX expertise become crucial.
Industrial Design focuses on:
- Product aesthetics that align with brand values
- Material selection for both beauty and durability
- Manufacturing-aware design decisions
- Form factor optimization
User Experience design ensures:
- Intuitive interface design
- User research-driven development
- Consistent interaction patterns
- Regular usability testing and refinement
We like to consider User Experience as the Industrial Design of software. We’ve gotten to work on industrial design focused products like Monarch Ring Holder and consumer facing apps like Silent Wake Up that showcase the importance of these disciplines.
System Integration: A Holistic Approach to Hardware Development
In hardware development, individual components are just the beginning. Success comes from understanding how these pieces work together to create a cohesive, reliable product. At NEDlabs, we’ve learned that taking a systems perspective is crucial for successful product development.
Understanding the Full Picture
Hardware success depends on system integration. One small change cascades through the entire product:
- Mechanical changes affect thermal performance
- Thermal constraints impact electronics
- Electronic design shapes firmware needs
- Firmware capabilities define software requirements
The Three Critical Layers
The Physical Layer: Where Hardware Meets Reality
The foundation of any product is its physical implementation. This layer encompasses everything you can touch and measure: circuit boards, sensors, mechanical assemblies, and power systems. But it’s not just about the components themselves – it’s about how they interact with the real world.
Consider a vibration motor in your smartwatch. Vibrations cause friction and heat – now we must consider heat dissipation and cyclical stresses on fasteners, on top of typical constraints such as power consumption, size, and manufacturing.
The Control Layer: Making Hardware Smart
Above the physical layer sits the control layer – the firmware and embedded systems that bring hardware to life. This layer manages resources, handles real-time processing, and maintains system state. It’s the conductor of our product orchestra, ensuring every component plays its part at exactly the right time.
The control layer manages complex requirements and capability is heavily based on the hardware and parts selected.
The Application Layer: Creating User Value
The application layer is where technical capabilities transform into user benefits. It encompasses user interfaces, data management, cloud connectivity, and feature implementation. This layer must make complex operations appear simple and intuitive to users.
For example, when a user adjusts their smart thermostat through a mobile app, the application layer coordinates a complex dance of data flow, security checks, and system updates – all while providing immediate feedback and maintaining system reliability.
Building for Success
Experience has taught us several key principles for successful system integration:
First, design for integration from the start. Clear interfaces and robust protocols save countless hours of troubleshooting later. Documentation isn’t exciting, but it’s essential for complex systems.
Second, plan for evolution. Products should be designed with upgrade paths in mind. Modular architectures and expandable systems help future-proof your investment.
Finally, consider the entire ecosystem. Your product exists within a larger context of user environments, support systems, and maintenance requirements. Understanding this context is crucial for long-term success.
We’ve seen this systems approach be effective after proof of concept is confirmed:
- Development timelines shortened by addressing integration challenges early
- Maintenance simplified through clear system architecture
- Future expansions enabled by thoughtful system design
Looking Forward
As products become more connected and sophisticated, system integration becomes increasingly critical. Success requires not just technical expertise in individual disciplines, but a deep understanding of how systems work together.
Common Hardware Development Pitfalls: Plan ahead and respond quickly
Hardware development rarely goes perfectly to plan. Success comes from both anticipating challenges and responding quickly when they arise. Here are the issues to watch for – and how to handle them effectively.
Overlooking Design Complexity
Design mistakes that are caught further in the development cycle cost much more to fix as they require rework. Involving an experienced engineer earlier will help you catch these before they become expensive problems.
Neglecting Supply Chain Redundancy
Choosing parts isn’t just about specs and price. For OTTO’s home automation products, we looked at:
- Supply chain reliability (location of sources, number of vendors/sources)
- Manufacturing lead times
- Component lifecycles
This approach helped them maintain production when competitors faced supply chain disruptions.
Rushing into Certification
Certifications can take a long time and be expensive. Testing in-house takes time, but can save a lot in the long run. Catching a mistake while in-house testing means you don’t need to redo 3rd party testing.
Manufacturing: The Reality Check
Beautiful prototypes don’t always translate to manufacturable products. Success requires:
- Manufacture considerations earlier in the development cycle
- Understanding must haves vs nice to haves
- A manufacturing partner that fits your needs
Take a Balanced Approach
Hardware development will always bring surprises. The key is combining thorough preparation with quick problem-solving:
- Plan thoroughly but stay adaptable
- Test early and often
- Address issues as soon as they appear
- Document what you learn
Remember: Every hardware project faces challenges. Success comes from spotting them early and acting decisively.
Get expert feedback on your project's challenges and development approach.
Schedule a 30-minute consultation to get guidance on your hardware project and ask any questions that are unique to your project.
Making the Right Choice: Internal Teams vs. Development Partners
Your choice between internal teams and development partners impacts both immediate project success and long-term strategy. Consider these key factors:
Internal Development Teams
Building your own team gives you complete control over your development process. Many successful companies start here, especially when product development is central to their strategy.
Advantages:
- Complete control over priorities, timelines, and scope
- In-house knowledge retention
- Long-term cost benefits for continuous development
Challenges:
- Significant upfront investment in hiring and training
- 3-6 months to build an effective team
- Ongoing overhead costs regardless of project load
- Required expertise across multiple disciplines
Development Partners
Partnering with experienced development firms offers immediate expertise and reduced initial investment. This approach works particularly well for companies focusing on market strategy and product vision.
Advantages:
- Immediate access to proven expertise
- Reduced upfront investment
- Flexible resource scaling
- Access to specialized tools and equipment
- Established development processes
Challenges:
- Higher project-based costs
- Less direct control over day-to-day development
- Potential communication hurdles
- Need for strong project management
- Dependency on external timelines
Making an Informed Decision
Consider these key factors when choosing your approach:
Time Considerations
Your timeline significantly impacts this decision. Building an internal team typically requires:
- Team hiring and training: 2-4+ months
- Process development: depends on experience
- Equipment setup: 1-2 months
In contrast, development partners can often start immediately with established processes and infrastructure.
Strategic Importance & Resource Availability
Ask yourself:
- Do you need ongoing development capability?
- What expertise is crucial to maintain in-house?
- Do you have access to technical talent?
- Do timeline constraints apply to your scenario?
The Hybrid Approach
Many successful companies adopt a hybrid strategy that plays to the strengths of both internal teams and development partners. This typically means keeping product strategy and user experience in-house while partnering for technical development.
Internal Focus: Product Vision and User Connection
Your internal team often has the strongest understanding of:
- Customer needs and pain points
- Market positioning and competition
- User experience requirements
- Long-term product roadmap
This deep market understanding is valuable and hard to outsource. Your team knows your customers best and should drive these crucial decisions.
Development Partner Focus: Technical Execution
Meanwhile, development partners can focus on what they do best:
- Technical architecture and engineering
- Component selection and optimization
- Hardware and firmware development
- Manufacturing preparation
- Regulatory compliance
This arrangement lets each team focus on their strengths. Your internal team maintains product direction and user connection, while experienced engineers handle the complex technical implementation.
The right choice depends on your specific situation.
Summary: Your Next Steps in Hardware Development
Throughout this guide, we’ve explored the key aspects of hardware product development – from understanding core engineering disciplines to evaluating project complexity. Remember, hardware development succeeds when you plan ahead:
- The full scope of disciplines required, and how they compare to your internal capabilities.
- Downstream consequences of design decisions and changes, especially integration.
- Both the benefits and drawbacks of in-house vs development partners
You got this!
P.S. – Whenever you’re ready, here are 3 ways we can help you:
Dive Deeper with Our Cost Guide – If you found this guide helpful, you’ll want to read our next article: “Hardware Development Costs Explained.” You’ll learn how to budget effectively, spot hidden costs early, and optimize your development spending without compromising quality.
Get Our Free Planning Guide – Ready to start planning your hardware project? Our Hardware Development Planning Guide gives you the tools we use with our own clients. This practical resource includes project planning templates, requirements checklists, and timeline frameworks. It’s designed to help you ask the right questions and capture critical requirements before you invest in development.
Talk to Our Team – Sometimes the best way to move forward is to get another perspective. Schedule a 30-minute discovery call with our team to discuss your project. We’ll help you understand the technical requirements, identify potential challenges, and outline practical next steps.
