How Hardware Startups Benefit From Virtual CAD Machines

Hardware start-ups have high cash burn rates, but virtual CAD machines can help them preserve significant amounts of capital. Here’s how.

There’s a wave of nascent technology about to hit the world. Robotics, connected devices, Augmented Reality, wearables, implants and many more exciting pieces of hardware kit. Engineering talent and smart money propel this movement. In hardware incubators, ideas and capital come together to forge new hardware business models. Examples include HAX  (Shenzen), AlphaLab Gear (Pittsburg), and New Lab (New York). 

Despite exciting growth, the hardware start-up scene is unforgiving. Companies like Jawbone, Juicero and Pebble are just some of the well-known and well-hyped start-ups that didn’t make it.

Why is the field so challenging? CBI Insights, a leading analyst of start-ups, concluded that a high cash burn rate was the second-ranked cause of failure for hardware start-ups. The big quest – for any start-up – is to find the correct Product-Market fit before the funding runs out. But for hardware start-ups with a high cash burn rate, this challenge is twice as hard.

Unlike software firms, which only need to focus on perfecting their algorithms, hardware startups need to match their software with designs of physical objects, sourcing materials and components and manufacturing their tech. This makes it even tougher for them to reach the market.

Start-up’s shouldn’t waste cash in CAD workstations

One way that hardware start-ups can keep cash outlays to a minimum is to rent CAD software on a short-term basis, rather than spending huge sums of cash upfront on hardware. For example, Autodesk (Inventor) offers one-month subscriptions that let you iterate on small designs for a small monthly fee.

This is fine to begin with (although you will inevitably need to invest in software at some point), but what about the expensive CAD Workstations that are needed to run this software? The upfront cost is significant  – and you’ll normally need a few years before you break even on the investment.

CAD in the cloud is the answer

The good news is that there’s an answer to this problem. Virtual CAD Machines are a relatively new way of letting companies use CAD technology, and are ideal for hardware start-ups.

Start-ups can now rent virtual, cloud-based CAD machines for a small monthly fee. In this way, start-ups eliminate upfront investments in expensive software and hardware as they build their Minimum Viable Product.

Beyond this, virtual CAD machines help reduce costs in other areas as well:

• Engineers who work on virtual CAD machines don’t need expensive office-space. They can work from anywhere, saving on rent expenses
• Start-ups that design on virtual CAD machines can attract engineering talent in locations beyond Silicon Valley, the Boston area or New York. This reduces the payroll expense a lot.

With virtual CAD machines from designairspace, hardware start-ups can run lean and mean. This means that your company gets a longer runway to make it to product-market fit – and breaking into the market. Want to see how it works? Try our free trial today.