Resumo

Hardware startups face extra challenges such as supply chain, tariffs, certification, intellectual property protection and regulation (DiResta, Forrest, and Vinyard, 2015). The scenario might get harder in Brazil, due to difficulties for prototyping, recruiting and funding (Startupi, 2016). Also, the phenomenon is more complex and also attractive in the Healthcare Sector, with higher WACC (Damodaran, 2017a) and higher Revenue Multiples than average among 94 other sectors in Emerging Markets (Damodaran, 2017b).

The objectives of the study are: (1) to describe and analyze the development of a hardware startup in the healthcare sector in Brazil since its foundation in a hackathon to its first client, and (2) to identify events in the trajectory and dimensions of the ecosystem that most contributed to the development of its product and the formatting of its business model. Therefore, the text will prioritize a longitudinal view of the case. The study is justified because there are few publications addressing the development of hardware startups (DiResta, Forrest, and Vinyard, 2015).

Brazil is one of the most entrepreneurial nations in the world and stands out for the ‘Internal Market Dynamics’, but it is far below the average among more than 65 economies in terms of Physical Infrastructure, Bureaucracies, Taxes and Education (GEM, 2017). With more than 12 million inhabitants (IBGE, 2017), São Paulo is the largest and richest city in Brazil (São Paulo Turismo, 2014). Internally, São Paulo is among the top 15 ecosystems in terms of ‘Size’, but below the global average in the topics of ‘Funding’, ‘Market Reach’, ‘Startup Experience’ and ‘Talent’ (Startup Genome, 2017).

This Action Research is structured in four cycles, each consisting of four steps: ‘Plan’, ‘Act’, ‘Observe’ and ‘Reflect’ (Riding, Fowell, and Levy, 1995). Before the cycles, it was added the ‘Context’ to describe the São Paulo scenario presented above. The total duration of the Action Research was 25 months, in which, were counted 138 events. The First Cycle counted three days (0.4%) and 17 events. The Second Cycle counted 283 days (38%) and 38 (28%) events. The Third Cycle counted 96 days (13%) and 47 (34%) events. The Fourth Cycle counted 355 (48%) days and 36 (26%) events.

The configuration of the Business Model and the Product of the Startup was the result of the propagation of changes in the Innovation and Management Models, with specific directions of the Strategic Positioning and Investment Strategy in R&D, related to the Economic Model. The Innovation model is mainly based on combining its own resources with the ones of third parties in order to protype faster. The management model is mainly based on the hypothesis discovery and validation through interviews and pilots. São Paulo’s Entrepreneurial Ecosystem offered the market and support institutions.

This case offers three lessons learned: 1) Start by mapping the process in the field prior to prototyping, 2) First validate the market with own resources by investing little in adapted hardware, before investing in a proprietary technology, and 3) To protect from distracting demands, position it in the market with a pre-defined strategy for hardware and software, such as “Black Jack” when sold altogether; or “Agnostic” when sold independently. Although was not to the intention, the Management and Innovation Model role for this case could make sense to other authors and entrepreneurs.