Hardware mecca emerges in Space Coast, FL


From recent episodes of the Young and the Restless to the Netflix series, Grace and Frankie, the subject of startups and incubators is infiltrating mainstream media. Anyone tuning in knows that getting a hardware startup funded by venture capitals is difficult because the “margins just aren’t there” and “dealing with China” doesn’t excite high rollers.

Nationally, however, the number of early-stage funds investing in higher-risk, tangible products is up 30 percent from 2010.

Central Florida startups are mitigating risk for investors by developing relationships with local incubators and accelerators. This past month, Groundswell Startups published a podcast on founders leveraging manufacturing resources and business mentors in the Central Florida region.

Co-founder of Jaycon Systems, Derek Blankenship, runs a boutique prototype-to-manufacturing company. His team has undergone sprints of construction in recent months because sales are up 100 percent.  Jaycon Systems was named one of the finalists for GrowFL’s Companies to Watch 2017.

“We’re excited about the new pivots that are allowing us to expand,” Derek said. “We are developing partnerships across the country with engineering designers and focusing on what we do best and what makes us money: quick-turn manufacturing for custom products.”

Five years ago, Blankenship launched the company in his late twenties out of the garage. Today, Jaycon has landed a contract with Disney and Toys R Us — even opened a second office in Shenzhen, China. He says that while the hardware industry continues to flourish, the reality of what it takes to build a product and build a business around a product is still widely misunderstood.

“Before starting a company, founders need to ask themselves if this is a product people are going to buy,” Blankenship said. “Entrepreneurs also need to be realistic about whether or not their requirements are possible to engineer using today’s technology.”

In an effort to both bring the community together to celebrate new milestones in hardware startups and demystify the manufacturing process, Jaycon engineers will serve as mentors during the Prototype Series hosted by Groundswell Startups and the Economic Development Commission of Florida’s Space Coast. Selected applicants will receive 8-weeks of intensive business and technical support from industry experts in the Groundswell network.

“We’re located in the Space Coast because everyone supports us here and we’re looking to contribute value in a way that’s beneficial to the whole community,” Blankenship said

Startup founders are also making efforts to develop partnerships beyond the Space Coast to secure success. Co-founder of Alertgy, Marc Rippen, who has put forth steps to disrupt the multi-billion dollar diabetes market. Rippen has developed strategic partnerships and benefitted from consulting support from YCombinator in San Francisco and the Mayo Clinic’s Walleye Tank in Rochester, MN.

Rippen says that regardless of whether a founder has a hardware or software product, founders must identify their differentiator in a market that is primed for disruption. He added that anyone seeking to raise capital for a Series A round of investment is going to need to be associated with an incubator, or vetted individuals with a track record of success, to secure meetings and checks from funds out west.

“Y Combinator said they only incubate software companies,” Rippen said. “While they don’t do medical devices, they did fly us to California for an interview and did say they were interested in potentially supporting down the road. They said it was a good idea.”

While a hardware renaissance may or may not be on the horizon for companies like Alertgy, representatives at the Economic Development Commission of Florida’s Space Coast (EDC) say that they are making efforts to incentivizing early-companies to stay here by increasing access to certification and trainings for emerging manufacturing talent in-addition to offering tax incentives to companies seeking to ramp up production.

“The Made in Brevard initiative is designed to help elevate manufacturing within the community within Central Florida,” EDC senior business development director, Greg Weiner said.

The deadline for startups to apply to the EDC’s first Prototype Series cohort and receive support from Groundswell mentors is June 23. Additional opportunities to apply for mentorship from a collaboration with the EDC and NASA’s Technology Docking program are also available online. Click here to learn more about these opportunities.


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