206: How to Sell Your Hardware Product Business

Dan Shea is the Managing Director of Objective, Investment Banking and Valuation. He has been spearheading mergers and acquisition deals as an investment banker in the manufacturing sector for over 30 years. Today, Dan will share valuable knowledge for inventors, startups, and small manufacturers on the salience of thinking about the value of your product and product business well before the sale, focusing on a quality product and customer needs, and adding innovation to increase the valuation of your product for an eventual exit sale. 

Here are the key takeaways from the episode:

• Value to the customer is value for the customer.
• Start with the end in mind.
• Big companies are spending less money on R&D and more money on acquisition.
• There are a lot of advantages to creating a hardware startup, and corporate teams are looking for startups that are finding those opportunities that they missed.
• Most innovation is happening at small companies despite large companies getting most of the press.
• Innovating every year based on changing customer needs is critical!
• Use quality product design and a family of products as a core foundation.
• Businesses typically start with one product.
• Innovation doesn’t stop when your first product is built.
• Create your first product properly, and you create massive institutional value.
• Think about what the company has done throughout its history and what that likely means it can do in the future.
• Build a culture of innovation from the moment you conceive your hardware startup to maximize the valuation of a future sale.
• Charge more for your product as you are innovating, this ensures profitability, and margin is critical to product business buyers.
• Overnight successes are usually backed by 10 years in the making.
• Reflect on what buyers of hardware product businesses get excited about.
• Focus on building great, high-quality products, that is the most important part of a hardware business.
• Find ways to get the word out about your product using modest methods to drive early sales.
• With a global marketplace, there are lots of ways to sell to multiple pools of people, even with a very niche hardware product.

Dan Shea Links:

LinkedIn | Objective, Investment Banking & Valuation

The Product Startup Podcast Links:

https://www.ProductStartup.com/

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Mako Design Links:

https://www.makodesign.com/

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Kevin Mako Links:

Instagram | LinkedIn | Quora | Facebook | Twitter

Producer: MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to startups, small manufacturers, and inventors. Simply put, we are the leading one-stop shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to the above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories.