Most hardware founders either skip a critical development stage or stay stuck in one way too long, and both mistakes will destroy your margins and blow your timeline.
I'm going to show you exactly when to move from a dev kit, to a module, and to a full custom design, and what it costs you if you get the timing wrong.
In my latest video I show you the three stages every hardware product goes through and when it's time to move on.
Dev Kit → Module → Bare Chip: When to Move On
If you prefer you can read the article here.
Stage 1 is development kits — pre-built boards like Arduino, ESP32, or STM32 that let you test hardware and firmware concepts quickly without designing custom hardware.
This is where you validate your concept, test your firmware logic, and try to move fast without spending a fortune.
The beauty is speed and low cost since you can get a working prototype together in days or weeks instead of months.
But the main limitation is size and cost.
If your product needs to fit inside a specific enclosure, like a wearable or compact sensor, a dev kit probably won't get you there.
It's too big, too exposed, and it's not designed for manufacturing.
One big mistake I see is choosing Arduino for your dev kit prototype because it's easy to get started with, but Arduino doesn't give you a clean upgrade path to production.
A much better approach is to pick a platform from the start that has a clear path through all three stages.
If you go with an ESP32, you start with a dev kit in Stage 1, move to a module in Stage 2, and then to a bare chip in Stage 3 without throwing away your firmware.
Stage 2 is modules — pre-certified, production-ready sub-assemblies like ESP32 modules or Nordic nRF modules that combine a microcontroller with RF circuitry, memory, and power management in a compact, shielded package.
This stage is the right move when your product is too small for a dev kit, when it includes wireless connectivity like Bluetooth or WiFi, or when you're using a microprocessor and don't want to deal with complex memory layout.
One of the biggest advantages is pre-certification for FCC and CE on the RF portion, which saves you a huge amount of time and money.
Certification testing for a custom RF design can easily cost tens of thousands of dollars.
Modules let you skip all of that on the wireless side.
Most products stay in Stage 2 for years, often indefinitely, because the economics just make sense until you're producing tens of thousands of units.
Stage 3 is full custom board design — sourcing the microcontroller directly and handling your own RF design if your product needs wireless.
This makes sense when your volume is high enough that the module cost is materially hurting your margins, typically tens of thousands of units and up, or when you need size or performance optimization that modules can't deliver.
Going fully custom means new regulatory certification, including FCC and CE, which is expensive and time-consuming.
You also take on significant new design complexity with antenna design and tuning that requires specialized expertise.
This is exactly why jumping to full custom too early is one of the more expensive mistakes a hardware founder can make.
The unit cost savings don't materialize until volume justifies it, and the upfront investment can get very expensive.
But when the volume is there, this is where your profit margins really improve.
So don't do it until the market has already proven the product.
Talk soon,
John
P.S. If you need help moving your product through these development stages, then you can get guidance from me and other experienced engineers inside the Hardware Academy.