Benjamin Joffe, partner at Shenzhen- and San Francisco based HAX Accelerator, shares his thoughts with J Vignesh on what works for China’s hardware ecosystem and what could in India. HAX has invested in about 160 companies, including in Bengaluru-based Ray IoT, a maker of baby monitoring devices, and Mumbai-based Diabeto, which makes smart blood sugar trackers. Edited excerpts:
You operate HAX from Shenzhen. What makes China a hotbed for hardware manufacturing?
The Shenzhen electronics supply chain is the result of decades of investment and contracts with large and small multinationals like Apple. Shenzhen has several advantages but the #1, by far, is speed.
Even startups from Silicon Valley tell us they do as much in a week in Shenzhen as in a month back home. Imagine what they can do in three or four months— that’s about a year’s worth of development, saving time and money, and getting faster to market.
Also Read: Hardware startups now look up to desi trailblazers
The #2 advantage is skill. Any level of quality can be achieved. It doesn’t mean there is no friction in the process but, overall, it’s a huge benefit. Then, cost and scale (from 1 unit to millions) are the final advantages.
What can the Indian government possibly do in terms of policy to accelerate the manufacturing ecosystem for hardware startups?
Trying to replicate Shenzhen is like replicating Silicon Valley: It can’t be done. What can be done is building something else that leverages local advantages. India has a strong software scene.
If it wants to promote (say, Internet of Things), I think connecting entrepreneurs to Shenzhen—like they did with Silicon Valley 20 years ago—and supporting the early prototype stage to generate a larger number of startups is the way to go.
What is your take on the hardware ecosystem in India?
It’s growing but still very early. It doesn’t have enough resources for prototyping or enough early-stage investment. For later stages, the supply chain is not ready, and at least for a while it is probably better to leverage China. India has strengths coming from its IT sector experience and I think agri-tech and industrial IoT have huge potential. Health-tech might have too since there is a lack of doctors and many innovative devices could complement this. IoT security could do well, too, as it bridges business-to-business IT and IoT. An entrepreneur should always think “where can I find the best resources globally.”
You operate HAX from Shenzhen. What makes China a hotbed for hardware manufacturing?
The Shenzhen electronics supply chain is the result of decades of investment and contracts with large and small multinationals like Apple. Shenzhen has several advantages but the #1, by far, is speed.
Even startups from Silicon Valley tell us they do as much in a week in Shenzhen as in a month back home. Imagine what they can do in three or four months— that’s about a year’s worth of development, saving time and money, and getting faster to market.
Also Read: Hardware startups now look up to desi trailblazers
The #2 advantage is skill. Any level of quality can be achieved. It doesn’t mean there is no friction in the process but, overall, it’s a huge benefit. Then, cost and scale (from 1 unit to millions) are the final advantages.
What can the Indian government possibly do in terms of policy to accelerate the manufacturing ecosystem for hardware startups?
Trying to replicate Shenzhen is like replicating Silicon Valley: It can’t be done. What can be done is building something else that leverages local advantages. India has a strong software scene.
If it wants to promote (say, Internet of Things), I think connecting entrepreneurs to Shenzhen—like they did with Silicon Valley 20 years ago—and supporting the early prototype stage to generate a larger number of startups is the way to go.
What is your take on the hardware ecosystem in India?
It’s growing but still very early. It doesn’t have enough resources for prototyping or enough early-stage investment. For later stages, the supply chain is not ready, and at least for a while it is probably better to leverage China. India has strengths coming from its IT sector experience and I think agri-tech and industrial IoT have huge potential. Health-tech might have too since there is a lack of doctors and many innovative devices could complement this. IoT security could do well, too, as it bridges business-to-business IT and IoT. An entrepreneur should always think “where can I find the best resources globally.”
