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Electric Objects was a company to watch. They had a simple, easily explainable concept: a framed painting that wasn’t a painting at all, but was actually a screen that you could change to a huge selection of digital art (or your own). They were commissioning original pieces and working with cutting-edge artists — it seemed as if it was becoming a medium unto itself.

But then in 2017, they closed up the hardware business and GIPHY acquired the rest of the company. Jake Levine, the founder and CEO, recently released an honest and revealing five-part postmortem, which is a fascinating read in its own right, but also offers some insight into the potential pitfalls and paths to success for future hardware companies.

In the section, “Costs of Growth“, Levine recounts the joy from producing hardware, but also the invariable constraints.

Building a physical product is as moving as it is challenging. There’s nothing quite like knowing that something you dreamed up lives in thousands of homes all over the world. I don’t mean to dissuade anyone from pursuing a hardware adventure, only to shed some light on the tricky realities of doing so. These challenges are not insurmountable, but they should be understood and faced squarely.

Facing it squarely means having a real understanding of the costs of growth, and making dead sure that you have enough capital to hire your team, develop your product, order your product, and market your product. You can finance the company with friendly manufacturing terms, profitable sales, affordable debt, or venture capital, but it needs enough funding to reach the next milestone of investor validation or profitability.

In the section, “Gods of Belief“, there are some especially salient points discussing the issues that arose from balancing the needs of the company, the market, and investors. They are not explicitly at odds, but it’s telling that these were partly in conflict and raises some hard questions about taking on outside funding.

If you find yourself organizing your business around what you think the next crop of investors want to see, rather than what’s good for the business, you’re handing your business over to the gods of belief. The good news is that the inverse is also true: the more profit you have, the less belief you need.

I’m not saying I will never again seek out venture capital. I think I’m happiest when I’m building products and businesses that demand belief, and venture is an asset class designed to fund belief. What I am saying is that I’d like to need belief a little less the next time around.