In today’s high-tech industries, technological innovation has become a crucial strategy for businesses seeking growth and expanding competitiveness. The growth of technology-based startups is especially notable, as they employ innovation processes that are often unfeasible within larger organizations. However, despite the abundance of talent and ideas, illustrated by the countless patents filed by entrepreneurs, many innovative companies struggle to translate their breakthrough technologies into commercial success. For startups developing hardware technology, the challenges are even more complex. These firms face significant hurdles in scaling up their operations, as regulatory and industry standards compliance add layers of complexity to their development processes. These startups often encounter conflicts between the iterative innovation process and the need to meet mandatory compliance requirements, leading to delays and increased costs.

This study investigates the challenges hardware startups face with regulatory and industry standards compliance, offering insights for entrepreneurs and stakeholders. The central research question explored is: "How can technology-based hardware startups include regulatory and industry standards compliance during the development process of their technology and products?”
To answer this question, a systematic literature review is carried out to map and thoughtfully understand the existing academic concepts related to this topic. Also, more specific exploratory research is performed to create a foundational understanding of the regulatory and industry standards landscape, faced by hardware-tech startups. Thirdly and most significantly, interviews were conducted with twelve hardware tech startups across various industries. These interviews provided knowledge of participants' experiences, motivations, and insights.

The findings of this study revealed that technology-based hardware startups find consensus in balancing validated learning principles i.e. hypothesis-driven entrepreneurship and hardware development, due to inherent hardware constraints. These challenges include restrictions in producing multiple MVPs, the inability to conduct pilot testing and long development cycles. However, all startups emphasize the importance of early market interaction for validating their business and customer assumptions. In addition, technology-based hardware startups face a complex regulatory landscape that requires adherence to both mandatory technology and product regulations, and additional industry standards, impacting their development processes. Awareness in startups of relevant regulations and standards varies, with some startups engaging external experts while others rely on market feedback. Overall, it is hard for startups to accurately estimate the real impact of compliance processes, especially since lead times for certification approvals, managed by notified bodies, do not align with rapid iterative development. Compliance processes can lead to increased costs and delays, requiring startups to build internal expertise to manage these requirements effectively. Furthermore, the timing of compliance efforts is critical, to align and implement requirements with product development phases.

Ultimately, this research highlights the need for an integrated approach for compliance and product development, while stressing that the challenges that come with compliance, are often overlooked by startups, academia, and the broader ecosystem.