In a recent podcast hosted by Sifted, Carl Pei, the CEO of Nothing and former co-founder of OnePlus, shared a statement that struck a chord with serial entrepreneur Violetta Bonenkamp: “If you’re serious about hardware, you should spend time in China.” This declaration comes at a time when Europe’s hardware startups continue to grapple with scaling challenges, while China leads the charge in manufacturing efficiency. As a European entrepreneur with vast startup experience, I find Pei’s insights hauntingly accurate, and they shine a light on some uncomfortable truths about the state of hardware innovation in Europe and global markets.
The European Hardware Dilemma
Let’s face it: hardware is not Europe’s forte. Statistics show that more than 85% of global hardware supply chain activity is centered in Asia, with China being the undisputed leader in manufacturing, prototyping, and scaling. Startups across Europe often struggle due to a lack of ecosystem depth, insufficient suppliers, and slow prototyping cycles compared to their Chinese counterparts. For years, I’ve been mentoring tech startups at incubators like Yes! Delft and Brightlands, and the complaints are strikingly similar: too expensive, too slow, and too uncertain.
Carl Pei’s experience resonates as he reflects on how time spent in Shenzhen taught him how to “move fast and design exceptional products.” For European founders, this comparison feels brutal but necessary.
Why Is China So Crucial for Hardware?
In case you’re wondering why everyone talks about China when it comes to hardware, here are some staggering facts and insights:
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Unmatched Supply Chain Ecosystem
With suppliers ranging from global giants like Foxconn to niche specialists, China provides a comprehensive network for every type of hardware need. In Europe, finding the right supplier may take weeks, if not months, compared to hours in Shenzhen. -
Prototyping Speed
Carl Pei’s statement about the speed of innovation is well-earned. In China, you can iterate hardware prototypes in days due to the proximity of factories and high availability of resources. European companies can be bogged down by regulations and complex logistics, slowing progress immeasurably. -
Cost-Effective Manufacturing
From production to innovation, China’s manufacturing costs remain unbeatable thanks to years of optimized processes and economies of scale. This matters deeply to startups managing slim margins. -
Cultural and Strategic Advantage
China isn’t just about manufacturing, it’s a culture deeply rooted in strategic partnerships, problem-solving, and vertical integration. Spending time there, as Pei suggests, isn’t just about production; it’s about learning and integrating these lessons into your business DNA.
It’s eye-opening, isn’t it? These factors explain why even American tech giants like Apple design in Silicon Valley but rely heavily on China for execution. Europeans must address these gaps, or continue to watch opportunities drain to other shores.
My Insights: Lessons for European Entrepreneurs
While learning from China’s manufacturing might is essential, European startup founders, myself included, must also forge new ways to compete globally. Here are some critical strategies to consider:
1. Bridge Talent and Trading Gaps
Spend time developing partnerships with Chinese suppliers while educating your team on rapid prototyping cycles. Programs like Techstars Supply Chain Accelerator could help your team gain an edge.
2. Tap the Best of Both Worlds
Europe excels in intellectual property protections, green energy innovation, and industrial design. Combine these strengths with China’s execution advantage through a hybrid model.
3. Master Supply Chain Soft Skills
Carl Pei emphasizes collaboration for a reason. It’s not enough to sign a partnership; you must immerse yourself in cultural understanding, negotiation, and operations to succeed in China.
4. Explore India & SE Asia
While China is reigning supreme, Carl Pei also highlighted India during the podcast. It’s poised to grow into a hardware hub with cheaper production and an enormous consumer base. Keep this market on your radar!
Most Common Pitfalls to Avoid
Working with Chinese manufacturing hubs is no walk in the park. I’ve seen startups hit roadblocks for avoidable reasons. Here’s what not to do:
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Skipping Research: Don’t just choose a supplier from Google. Vet them, visit their facilities, and cross-check quality credentials. Platforms like Alibaba Verified Manufacturer help streamline this process.
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Failing to Build Relationships: Chinese business practices are relationship (guanxi)-driven. Neglecting this cultural nuance can lead to misunderstandings and project delays.
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Focusing on Cost Alone: Cheap manufacturing is tempting, but don’t compromise quality or let complexity overwhelm price negotiations.
How to Make Hardware Work in Europe
If time in China still feels daunting, European entrepreneurs can take more realistic steps at home to make scaling a reality.
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Accelerators with Hardware Focus
Participate in programs such as EIT Urban Mobility or Eindhoven-based initiatives. These accelerators specialize in supporting physical product startups. -
Look for Venture Building Support
Leverage the non-profit ecosystem, such as the Hardware Club, where founders can connect, share insights, and collaborate. -
Bootstrap & Focus on Niche Markets
With lean budgets, hardware startups can successfully target niche markets like industrial robotics, advanced CAD systems, or healthcare devices. Niche audiences are smaller but more loyal and receptive to tailored B2B solutions. -
Adapt AI/IoT in Product Offers
Innovate by introducing emerging technologies like AI in hardware. Personalization and interoperability will define hardware 2.0. For example, explore IoT Edge platforms to differentiate.
Conclusion: Europe, China, and Hardware’s Future
Carl Pei’s journey reminds European founders, including myself, that we must seek learning where it’s happening fastest. For hardware, that’s undeniably Shenzhen or emerging Asian tech hubs. This doesn't mean abandoning core European strengths like design and IP, but rather complementing them with actionable lessons taken directly from China’s ecosystem.
The journey will be tough, but with the right strategy, Europe can close the gap. As a serial entrepreneur, I firmly believe that startups should learn globally and compete locally, integrating the best principles from different regions into stronger businesses. Spending time where hardware innovation thrives might just unlock your next breakthrough product, or even a billion-dollar company. And if that idea scares you, maybe Carl Pei is right to push us harder. Don’t wait for Europe's pace to catch up. Innovators move where the action is happening now.
FAQ
1. Why does Carl Pei advocate for spending time in China for hardware startups?
Carl Pei highlights China's unmatched hardware ecosystem, rapid prototyping cycles, and cost-effective manufacturing as critical advantages that European startups lack. Read the Sifted article about Carl Pei’s views
2. What are the challenges Europe faces in hardware innovation?
Europe struggles with limited supply chain depth, slower prototyping processes, and higher production costs, making it difficult for hardware startups to compete globally. Dive into the insights from the article
3. How does Shenzhen stand out as a hardware hub?
Shenzhen is a global leader in hardware innovation, with dense supplier networks, fast iteration cycles, and optimized manufacturing processes. Learn more about Shenzhen’s role in hardware
4. What are Carl Pei’s next moves with Nothing?
Nothing plans to focus on AI-native hardware, integrating artificial intelligence to deliver user-personalized, edge-computing-enabled devices. Learn about Nothing's AI ambitions
5. Why is India a significant market for the hardware industry?
Carl Pei identifies India as a rapidly growing market due to its young demographics, increasing tech adoption, and massive consumer base.
6. What role does AI play in the future of hardware?
AI-native devices, which adapt to users’ habits and integrate deeply into hardware, are the next frontier in consumer technology. Learn how AI influences modern hardware
7. What advice does Carl Pei have for hardware startup founders?
Pei emphasizes the importance of immersing in ecosystems like China’s to rapidly learn supply chain management, prototyping, and innovation practices.
8. Does Nothing have IP or design advantages over competitors?
Yes, Nothing leverages Europe’s strong background in industrial design, combining it with Chinese execution advantages. Discover Nothing’s unique approach
9. What obstacles do startups face when working with Chinese manufacturers?
Common pitfalls include inadequate supplier research, neglecting relationship-building, and focusing solely on costs instead of quality.
10. Which early-stage trends should hardware entrepreneurs watch?
Beyond China and AI, Carl Pei suggests keeping an eye on emerging hardware markets like India, as well as the convergence of IoT and deep learning technologies. Check out insights in IoT trends
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.