STATE OF HARDWARE

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The hardware industry is growing at an exhilarating pace. More companies are developing

innovative products, we have better tools for prototyping and manufacturing, and access

to these tools—and the knowledge around how to use them—is becoming more

universally available.

But we still have a ways to go before hardware development can be truly accessible to

everyone—companies face a myriad of complex challenges in taking an idea and turning it

into a commercially viable product.

So to better understand these challenges, we surveyed over 200 people in the hardware

community and today we’re excited to share our findings with you in this free report.

We recognize this is only a small sampling of what’s going on in the larger ecosystem, but

we hope this snapshot provides value to the community so we can all reflect, continue to

iterate, and innovate our way to better hardware development.

At Fictiv, we’re working everyday to make it easier for companies to develop physical

products by building better tools and creating better resources for truly democratized

hardware development.

INTRODUCTION

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personal electronics 30%

home automation 16%

other 9%

business tools & infrastructure 7%

education 4%

accessories 3% automotive 2%

sports & fitness 7%

medical 8% hardware platform 6%

aerospace 4%

industrial robotics & automation 4%

INDUSTRIES

3

PROTOTYPING

4

Hardware companies are working to build products fasterMost companies budget 1-3 months to build functional prototypes

4% answered N/A

1 mo0 2 mo 3 mo 4 mo 5 mo 6 mo 7 mo 8 mo 9 mo 10 mo 11 mo 12 mo 13 mo

41% 22% 13% 7%13%

1-3 mos 1-3 mos 1-3 mos

medicalpersonal electronics accessories

4-6 mos 1+ yr

business tools &infrastructure

aerospace

1-6 mos

sports & fitness

1-3 mos

hardware platform

1-6 mos

home automation

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Most companies budget another 3-6 months to go from

functional prototype to production

1 mo 2 mo 3 mo 4 mo 5 mo 6 mo 7 mo 8 mo 9 mo 10 mo 11 mo 12 mo

22% 11%11%31% 15%10%

6 - 12+ mos

home automation

3-6 mos

medical

3-6 mos

personal electronics

3-6 mos

sports & fitness

1-6 mos

accessories

12+ mos 6 - 12+ mos3 - 8 mos

business tools &infrastructure aerospacehardware platform

0 13 mo

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But there are still hurdles preventing companies from shipping on time

4 in 5of the VC backed crowdfunded projects were late in 2014.

30%of late projects still hadn’t shipped byQ1 2015.

– TechCrunch’s The State of Hardware Crowdfunding in Q11 | 2015

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Most common prototyping tools

Hardware companies have access to more tools

CNC LaserCutting

DuctTape

Foam/Clay Models

InjectionMolding

3D Printing

91 %73%

65%

46%34% 31%

RTV Molding

23%

ELECTRICAL

MECHANICAL

Arduino OthermillCustomPCBA

64 %

FPGA

9%

56%

Bread-board

58%

ParticalPhoton

8%

RaspberryPi

34%

6%

Survey participants could select more than one answer

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DESIGN

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Solidworks is the most commonly used CAD program

17%

AutodeskInventor

14%

Rhino

12%

OnShape

OpenSCAD

PTC Creo

9%

9% 7%

Blender Autodesk TinkerCAD,

NX CAD, Alias

FreeSCAD, NX CAD, Maya

70%

Solidworks

20%

AutodeskFusion360

5% EACH 4% EACH

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More than half of Solidworks users (52% ) use it with other programs

Autodesk Inventor

15%

OpenSCAD

5%

Catia

4%

Rhino

15%

Autodesk Fusion

15%

PTC Creo

11%

Blender

6%

AutodeskTinker

2%

Alias

4%

OnShape

13%

FreeSCAD

4%

NX CAD

4%

Altium

3%

Maya

5%

SOLIDWORKS + ___________

Survey participants could select more than one answer

BUSINESS

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Raising capital is top of mind for hardware companies

Hiring talentFinding the right manufacturing partners

Fast development Distribution

Funding and resources is perceived as the greatest challenge in bringing

a successful product to market

Funding & resources 28%

21% 15%

12 %13%

3% of participants answered Access to Tools and 8% answered Other

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– Fred Wilson,co-founder of Union Square Ventures

Jan 1, 2016

Venture Outlook 20162 What Is Going To Happen In 20163

Minimizing burn rate is the mantra for 2016 as thought leaders predict cooling markets

” Markdown mania will hit

the venture capital sector as

VC firms follow Fidelity’s

lead and start aggresively

taking down the valuations

in their portfolios.”

” I suspect 2016 will be the year

that the more heated private

tech markets cool. ”– Mark Suster,

partner at Upfront VenturesOct 15, 2015

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– Cyril Ebersweiler,founder of HAX

Nov 22, 2015

– Matt Turck,managing director at FirstMark Capital

March 28, 2016

Internet of Things: Are We There Yet?4

and Firstmark Capital5

” Venture capital dollars in

the space have continued to

increase: $1.8 billion in

2013, $2.59 billion in 2014

and $3.44 billion in 2015”

The State Of Hardware For 2015 | TechCrunch6

Funding to IoT Startups Has More Than Doubled In Six Years7

HAX Hardware Accelerator8

” Investment in IOT startups

is likely to hit a record

height”

But despite overarching trends, hardware is still the fastest growing sector in the industry

15

– Chris Quintero,associate at Bolt

Sept 12, 2015

– Matt Witheiler,general partner at Flybridge Capital Partners

May 3, 2015

Who Invests In Hardware Startups? | TechCrunch9

Bolt 10

The State Of Hardware Crowdfunding In Q11

Flybridge Capital Partners 11

” Since 2010, venture capital

investment in hardware

startups is up more than 30x.”

” A total of 128 hardware

companies pre-sold nearly

$70 million in products in

Q1… a record quarter for

hardware crowdfunding”

PEOPLE

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82% of companies outsource in some capacity

25% 75%

MECHANICAL ENGINEERING

OUTSOURCE IN HOUSE

30 % 70%

ELECTRICAL ENGINEERING

OUTSOURCE IN HOUSE

28 % 72%

SOFTWAREENGINEERING

OUTSOURCE IN HOUSE

35% 65%

MARKETING

OUTSOURCE IN HOUSE

32 % 68 %

FIRMWAREENGINEERING

OUTSOURCE IN HOUSE

42 % 58 %

SOURCING

OUTSOURCE IN HOUSE

45% 55%

INDUSTRIAL DESIGN

OUTSOURCE IN HOUSE

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Gender diversity in teams is a challenge to confront

0%

4%

18%

46%

32%

ALL WOMEN

MOSTLY WOMEN

CLOSE TO 50/50

MOSTLY MALE

ALL MALE A report by the Congressional Joint

Economic Committee12

of engineers in the work force nationwide are women.

14%

DEMOGRAPHICS

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213 respondents

47%24%

ROLES

Founders/CEOs

MechanicalEngineers

IndustrialEngineers

ElectricalEngineers

Marketing/Business

53%23% 19%

Survey participants could select more than one answer.

21

ETHNICIT Y

White or Caucasian 67%

19%

7%

Asian/Pacific Islander

Hispanic or Latino 4%

Black or African American 3%

Other

22

of survey takerswere male

89 %

GENDER

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DEMOGRAPHICS

YEARS IN OPERATION EMPLOYEE COUNT EDUCATION

BA 44% 1-3 32%

31% 4-10

11% 11-20

11% 21-50

7% 51-100

8% 100+

< 1 yr 14%

16% 10+ years

8% 7-10 years

15% 4-6 years

47% 1-3 years

AGE

< 21

32%

1%

13%

20%

14%

13%

7% 50+

41-50

36-40

31-35

26-30

21-25

1%

Trade/Technical/Vocational Training

Associate Degree

1% High School

5% Some

College

5% Professional

9% PhD

35% MA

WHO IS F ICTIV ?

Fictiv is a hardware development platform for engineers and designers. We o�er a simple

online tool that allows users to fabricate parts faster than ever before using distributed

manufacturing.

Leveraging a network of curated vendors, our algorithm intelligently routes parts to

immediately available machines for faster production (24 hour turnaround on 3D printed

parts, for example). This allows our customers to prototype more e�ciently and focus their

time and e�orts on innovation.

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