5 Counter-Intuitive Lessons from a Hardware Startup Pitch

When Marine veteran Mike Burton pitched his smart bike lock startup Lockstop to investors, he broke several conventional startup rules. His pitch revealed surprising insights about building a hardware company in today's software-obsessed world.

1. The Power of Turning Down Small Checks

In a stunning moment, Burton turned down a $50,000 investment offer from Jesse Middleton on camera, stating firmly: "We don't allow any investments under 100k." While most early-stage founders scramble for any check they can get, Burton's stance demonstrated rare confidence. Investor Paige Finn Doherty's reaction was telling: "I love that you drew that hard line. That was awesome."
This move risked losing valuable investor connections but showed discipline in maintaining their fundraising strategy. It sent a clear message: Lockstop isn't desperate for capital.

2. Hardware as a Competitive Advantage

While most startups avoid hardware due to its complexity, Burton sees it as a moat. "Anything that's hard to do is hard to disrupt," he explained. "Once we have a hardware component there, it's very difficult to remove."
This perspective flips the common wisdom that hardware is a liability. Once cities install Lockstop's devices, they're unlikely to rip them out and switch to a competitor. The physical infrastructure creates stickiness that pure software solutions can't match.

3. Military Experience Shapes Company Culture

Burton's military background directly influences how he builds his company. "When you're performing with the most elite of the most elite, it requires very high expectations," he explained. This translates into careful team selection and high performance standards.
Rather than rushing to hire, Burton focuses on finding team members who can handle the intense demands of startup life. His military experience taught him that having the right people matters more than having many people.

4. Conservative Projections Can Be Strategic

While most startups pitch massive market opportunities, Burton projected $60 million in revenue after five years - a number that made investor Jesse Middleton wonder if they weren't thinking big enough.
But this conservative approach might be strategic. By under-promising while maintaining potential for over-delivery, Burton builds credibility. It's easier to exceed modest projections than justify missing ambitious ones.

5. City Sales vs Consumer Market

Instead of pursuing individual consumers, Lockstop targets cities as their primary customers. "We charge the cities... they install these devices, and now they get access to those mobility insights that don't exist anywhere else," Burton explained.
This approach has multiple advantages:
  • Cities can use federal grants for purchases
  • Larger contract sizes
  • Data monetization opportunities
  • Fewer customer service headaches than B2C
The strategy focuses on fewer, larger deals rather than thousands of small transactions.

The Results

While Burton's unconventional approaches meant turning down immediate investment, they may pay off in the long run. Jesse Middleton remained interested in potentially leading a larger round after seeing more traction.
Lockstop's story shows that sometimes the counter-intuitive choice - whether it's embracing hardware, turning down checks, or staying conservative with projections - might be the right strategic move. It's a reminder that startup conventional wisdom isn't always wise.
Hardware Is Hard

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