Product Development in Startups

If you have ever been to a Hackathon or Startup Event, you know that these types of events mostly revolve around software development in some shape or form. The entry-barrier for apps and online services is low - you only require a computer and the skills needed. The competition, however, is proportionally high and it is only the few dedicated people with well-executed ideas that actually become successful startups. In contrast, startups working on physical products are less, which in turn means less competition in developing novel products. In this blog post, we are going to talk a bit about how physical product development in startups differ from traditional software-only startups and how to avoid some of the pitfalls in the development process. Let's start by looking at some of the factors that contribute to the higher entry barrier when developing and designing physical products:

  1. Access to the right manufacturing tools, such as laser-cutters, 3D printers and CNC routers

  2. The lack of experience in using these tools, the accompanying software and managing the overall product development process

These points contribute to the rarity of product startups, simply because the initial investment in these tools has historically been too big and the general availability too limited.

Manufacturing Tools

As manufacturing tools such as 3D-printers and laser-cutters mature, physical product development becomes increasingly feasible with a limited budget. It doesn't require the human capital and the large machine park as it once did. Fabrication labs have been opened all-over, making it possible for ordinary people to bring ideas to the physical realm.

Even 3D-printer/CNC-router sharing has been increasing in popularity for some time now (see if there's any hubs near you on 3DHUBS). 3D printers, such as the Ultimaker, is popular among enthusiasts for its ease of use and relatively cheap price tag.
Other tools, such as the laser-cutter also works great for creating prototypes, as software tools enable digital 3D models to be converted to sliced physical objects, such as seen in Autodesk's 123D Make program below:

Most of these manufacturing tools allow you to iteratively prototype the physical manifestation of your idea, but at one point, you are going to hit a max level of fidelity, as e.g. 6-axis CNC routers and other high-end production machines are still very expensive - but why do you need to do everything yourself? Once you are set on the design, have the embedded hardware on lockdown, you can start consulting companies who work with injection molding and light metal productions. Some companies do a small number of productions, which helps when you're doing a lean launch of a physical product. In developing physical products, you cannot do everything yourself, at least not if you are striving for perfection - iterations are more expensive and still require specialised knowledge, as opposed to software development. The product has to reach a final state, before you enter production, which cannot be said about software, where you can push new builds as your competencies increase. Using external collaborators can also save you a lot of time and headaches, and they are not even expensive (Spoiler! Shameless plug). Material costs can also be reduced, as low-fidelity prototypes in cheap materials, such as foam blocks, can be successfully used for communicating and finalising the design and hardware setup - before choosing product materials and continuing towards production.


Different stages of the development process require different competencies. The skill-set needed throughout is a combination of industrial design, engineering and software development. Thus, startups developing physical products require larger, diversified teams with more specialised knowledge or at least outsourcing some of the manufacturing to external collaborators. Many larger consumer product-oriented companies, such as the Danish audio/TV design company Bang & Olufsen, use external product development and design collaborators, since a new set of eyes can provide some new ideas for an existing problem space.

We acknowledge (and love!) the Maker-movement, where DIY enthusiasts engage in both software and product development. These Makers show that the variety of skills needed to development and program physical products can be achieved by a single person - switching between designing 3D models to programming microcontrollers. The ability to both design and program software will be essential for future product designers as technology become more interwoven in physical products.

However, people from different domains can easily contribute to the design process, as ideation, low-fidelity prototyping is fun and engaging activities that effectively communicates ideas to endusers and domain professionals. We love to engage end-users and different stakeholders in low-fidelity prototyping sessions, as these often help people gain a new understanding of their customers' needs and pains.


At MONTEM we believe that physical product design is the new norm in startups - it will not replace software startups in any way, but in many cases it will simply make sense to develop a physical product; either as a standalone project, or as an addition to a software project. We believe that consumers will turn towards physical products with accompanying services as a reaction to the many subscription-based SaaS products available currently. Many products will furthermore contain technology - wireless connectivity in particular - as the availability of these chips increases and the prices drop. This will pave the way for the true internet-of-things revolution that is bound to happen within the next few years. Very exciting times ahead, indeed - we can't wait to see what the future brings!