Paige Finn DohertyFounding Partner, Behind Genius · Founding Partner at Behind Genius Ventures

when should you build a product and sell it vs raise venture financing?

16 Sept 2023 · 1 min

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In this interview segment, Speaker B, a former Apple hardware division manager, explains how the nature of hardware development—characterized by long iteration cycles and costly physical changes—contrasts sharply with the rapid, low‑cost iteration possible in software. This fundamental difference shapes strategic decisions about whether to build a product in‑house, sell it outright, or seek venture financing. Using a vivid analogy of building a spaceship to reach Mars, Speaker B illustrates why hardware projects demand more upfront capital and longer timelines, influencing the choice between bootstrapping, selling, or raising venture capital.

How did you think about making that distinction between building the product and selling it to raising venture financing? How did you think through that decision?
Yeah, I think, you know, when you're, when you're used to doing hardware, I was at Apple for about 8 and a half years before this. I managed a division. The one thing you get used to sort of gets trained in you very early on because you're doing hardware is unlike software, you can't constantly be iterating.
Oh, I see.
You can't launch something and sort of say, okay, tomorrow I'm gonna adjust it, and the day after I'm gonna adjust it again, which you can do in software, but you can't do that in hardware, right? You know, it'll take you at least a few weeks, if not a few months, to sort of make hardware changes. And so you, it's sort of like, or the extreme analogy I'd use is imagine if you were building a spaceship to get to Mars.
Yeah.
You get one shot.