Hardware Start-ups in the Scale-up Process of Production - A Mapping of Challenges

Abstract

The paper sets out to increase the understanding of how hardware start-ups scale-up their production, and elaborates further on the challenges they are facing in this phase, often called 'the valley of death'. The research design is based on a qualitative approach and data collection through deep-interviews of 14 hardware start-ups and 7 production experts with extensive experience of production scale-up. A theoretical review adds to the understanding of the relatively immature field and supports the data analysis. The study presented in the paper is part of an innovation project called 'Production Angels' which is a new concept developed for the purpose of supporting Swedish hardware scale-ups to overcome the valley of death, and to produce their new product in Sweden instead of outside the country which is often the case. Many hardware start-ups do not survive this phase of the innovation process, ending up in selling the product idea or even company. The results of the data collection elaborates on a number of challenges the start-ups meet in the production scale-up phase, here categorized into seven areas; financing, market analysis feasibility study, production competence team building, prototype development manufacturing, production process understanding, suppliers manufacturers, and support from the innovation system.