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How First Resonance Killed Their Upmarket Plans and Won the Hard Tech Scale-Up Market

Most B2B playbooks say move upmarket once you’ve proven product-market fit. First Resonance planned exactly that—then watched their data prove the opposite.

In a recent episode of Category Visionaries, Karan Talati, CEO & Co-Founder of First Resonance, explained how his company captured the emerging hard tech manufacturing market by staying focused on scale-ups rather than chasing Boeing and Northrop Grumman.

From SpaceX’s 3x Headcount Surge to Founding Insight

Karan joined SpaceX in 2013 as employee 2,000, during the company’s shift from prototype to production. “The company was going from designing and building like one rocket and it just needed to work once into like what does a production operation look like at higher scale,” he explains. Three years later, the company had tripled to over 6,000 people.

The growth exposed a systems gap. SpaceX had built internal tools to orchestrate factory operations because commercial alternatives couldn’t handle their needs. “These product categories broadly exist already, but they’re all very legacy and they’re all very bad and nobody likes them,” Karan notes.

For emerging hardware companies, the problem was worse. Legacy manufacturing execution systems required “huge timeline to implement, very expensive” and were “just unattainable” for startups trying to scale from R&D to production.

After leaving SpaceX, Karan spent two years at a martech startup—an intentional departure from aerospace bureaucracy. But by 2019, former colleagues were founding hard tech companies, and the pattern was clear: they all faced the same infrastructure problem SpaceX had solved internally.

The Revenue Math That Killed the Enterprise Motion

First Resonance launched with the standard B2B progression: win scale-ups, then graduate to enterprises. Defense primes and legacy aerospace would be the endgame.

The data reversed that plan within months.

“What we found actually was that we didn’t need to,” Karan says. “The ROI and the value was just so much bigger in sticking to what we started out with, because that market has just exploded in terms of value.”

The scale-ups weren’t just growing—they were expanding faster than First Resonance could capture them. Meanwhile, enterprise deals meant “long sales cycles” with customers “so averse to modern technology” that they represented “stagnating giants.”

Here’s the counterintuitive insight: when your core segment is in hypergrowth and customers are physically expanding (adding factories, production lines, teams), staying focused on that segment can deliver better unit economics than moving upmarket. The companies First Resonance signed early weren’t staying small—they were scaling into the revenue tiers that would normally trigger an upmarket strategy.

Testing PLG, Killing the Motion, Keeping the Infrastructure

In 2019, product-led growth was the dominant narrative. First Resonance tested it.

“We tried a PLG motion, a product led growth motion,” Karan explains. “We quickly learned that it does not. This is a very like centralized, coordinated, orchestrated, many decision makers, many influencers kind of around the table.”

Manufacturing software purchases involve operations, quality, production managers, and executives. The buying committee is structural, not a go-to-market problem to solve with better onboarding.

But First Resonance made a tactical decision most companies miss: they kept PLG’s instrumentation while pivoting to enterprise sales.

“We take a lot of the tools in a PLG model of observing product utilization and usage and engagement and things like that, but we apply them very much in this more traditional kind of annual contract, go to market,” Karan says.

The playbook: sell through enterprise motion, instrument like PLG, and use product analytics to “observe those product analytics and customer signals and basically package subsequent value” for renewals and expansion during annual contract cycles.

It’s a hybrid model that matches manufacturing’s buying reality while maintaining the visibility that drives net dollar retention.

Adjacent Market Expansion Through Pattern Recognition

First Resonance’s expansion into nuclear energy wasn’t strategic planning—it was pattern recognition.

Their initial customers were “new space” companies: satellite manufacturers, launch providers, companies building what couldn’t exist a decade ago. But around 2021, Karan noticed former aerospace talent founding nuclear energy startups.

“The same pattern that we saw in new space getting into kind of like sustained aerospace manufacturing, it started to happen in nuclear energy,” he explains. “And this is like literally we’re talking about like the last like three, four years.”

The pattern: industries where incumbents are “too big to fail” but “so large and inertial, so hard to move, that startups are going to have to come in and close that gap.” When SpaceX alumni start companies in a vertical, it signals the same manufacturing scale-up challenges are emerging.

First Resonance didn’t need to rebuild their product. The technical requirements—moving from R&D prototypes to production manufacturing, managing quality systems, orchestrating factory operations—were identical. The expansion was almost automatic.

The tactical lesson: if your core disruption involves startups challenging legacy incumbents, watch where your initial vertical’s talent network goes next. Adjacent industries with similar incumbent dynamics are natural expansion paths.

Cloud Service Provider Compliance as Competitive Moat

Defense contractors operate under CMMC, FedRamp, and NIST 800-171 requirements. First Resonance invested early in compliance infrastructure, treating it as strategic advantage rather than overhead.

“We have a sharp eye on CMMC, we have a sharp eye on FedRamp and we’re also monitoring what the changes are coming in with FedRamp 20x,” Karan explains.

The tactical advantage: when defense startups need manufacturing software, security requirements dramatically narrow the vendor pool. Competitors without compliance infrastructure need years to catch up.

But Karan sees a larger opportunity. “The good news I think right now for innovation and tech is that regulations are getting easier, not harder. And that’s a benefit to innovators and to solving problems.”

As defense procurement modernizes and regulations streamline, First Resonance’s early compliance investment positions them to move faster than less-prepared competitors. What started as cost center becomes moat.

Brand Strategy for the Incoming Generation, Not the Incumbent Executive

First Resonance’s visual identity is deliberately bold: sharp lines, bright colors, cyberpunk aesthetics. It looks nothing like traditional enterprise software.

The decision was intentional. “The old guard is rapidly retiring, and there’s a new class of workforce coming in,” Karan notes. Manufacturing is “cool” again, and the engineers at these companies don’t want tools that look like they were built for retiring executives.

“It really comes down to just taking bold bets on attracting where things are going and effectively designing for vibes,” he explains. The aesthetic combines “cybernetic systems with like inspiration and motivation of like being in the Matrix.”

The contrast with typical B2B design is stark. While others embraced “softer design and parallax animations,” First Resonance rejected those trends entirely. “It’s like okay, throw all that out. Like what’s the thing that really like we’d want to do from the ground up?”

The insight: when your market is undergoing generational workforce transition, design for the champion who will evangelize your product, not the executive who signs the contract. The 30-year-old former SpaceX engineer choosing manufacturing tools cares more about the product feeling modern than the brand feeling “enterprise-safe.”

Expansion Through Physical Growth, Not Logo Proliferation

First Resonance’s growth model exploits a unique characteristic of their market: customers are literally building more factories.

“We don’t have to count on a proliferation of logos,” Karan explains. “We could just get deeper and deeper with companies that inherently will get larger because these industries are only growing.”

Aerospace and defense are expanding due to geopolitics. Energy has “a tailwind of decades” from electrification. First Resonance’s customers aren’t just using more software seats—they’re opening second and third factories.

The expansion motion is straightforward: “Observe those product analytics and customer signals and basically package subsequent value” for annual renewals. When a customer adds factory square footage, First Resonance is already embedded in their operations and can expand into the new facility.

This creates a land-and-expand model tied to physical infrastructure rather than just software adoption. Every new production line, every factory expansion, every additional team represents expansion revenue.

For B2B founders in infrastructure software, the lesson is clear: if your customers’ usage scales with physical assets (factories, stores, vehicles, equipment), focus on deepening relationships in expanding markets rather than maximizing new logo acquisition.

The Convergence Thesis Driving It All

Underlying First Resonance’s strategy is a bet on hard tech’s structural shift. Karan points to Anduril—founded in 2018, already winning major defense contracts—as evidence the pattern extends beyond aerospace.

The companies First Resonance serves are building products that were technically impossible five years ago. Electric aviation required advances in battery density, composite manufacturing, and 3D printing to converge simultaneously. Micro-nuclear reactors emerged from research into space colonization power systems.

“We are going to be living in a world where the digital and physical are fully merged,” Karan says. AI is “making available to people in the digital world what was only limited once to people that operate in the physical world.”

The knowledge silos between mechanical engineering, electrical engineering, and software are breaking down. First Resonance is building infrastructure for that convergence—the operating system layer for companies building at the intersection of bits and atoms.

For founders evaluating markets, First Resonance’s trajectory illustrates a key insight: when multiple enabling technologies converge simultaneously, the companies capitalizing on that convergence need new infrastructure. The legacy systems can’t handle the pace or complexity of what’s now possible.

The hard tech renaissance isn’t hype—it’s a structural shift driven by technology convergence. And the companies winning in this environment are the ones who recognized early that staying disciplined on the core segment beats chasing upmarket logos when the segment itself is exploding.