The Veeve Hardware Pivot: Turning Supply Chain Crisis into Product Innovation

The Veeve Hardware Pivot: Turning Supply Chain Crisis into Product Innovation

When COVID-19 disrupted global supply chains and tripled raw material costs, most hardware startups faced an existential threat. But in a recent episode of Category Visionaries, Veeve founder Shariq Siddiqui revealed how they turned this crisis into a catalyst for innovation that fundamentally transformed their business model.

The Pre-COVID Hardware Challenge Initially, Veeve built complete smart shopping carts from the ground up. This made sense given their technical requirements: “Almost 40% of transactions that happen in a grocery store, there’s at least one item that is done by weight,” Shariq explains. Their original design incorporated built-in scales to handle produce and other weight-based items.

The Crisis Point Then COVID hit. “What Covid did is they jacked up the prices of raw material, which means that all these scale cards that were building, the cost of those cards almost went up three x,” Shariq recalls. For a startup selling to price-sensitive retailers, this posed an immediate threat: “As a startup, you have to pass on that cost back to the retailers. But the retailers weren’t willing to pay so much for these cards.”

The Two-Pronged Innovation Response Instead of just trying to weather the storm, Veeve completely reimagined their approach:

1. Smart Cart Retrofit Solution “We figured out how to basically take an existing shopping cart and embed a wing scale in that. So that allowed us to reduce our cost by almost 90%,” Shariq explains. This dramatic cost reduction made their solution viable for a much broader market segment.
2. New Modular Product They also created a simpler option: “Think of this as very simple product, which is android tablet like screen. It has a massive processor and multiple cameras on it, so it can be snapped onto any shopping cart.”

Expanding Market Opportunities This crisis-driven innovation opened new markets: “When you think about use cases like Sam’s Club, Costco, Home Depot, Voss, Target stores that don’t necessarily sell products by weight, for those, we basically started showcasing the new product and started gaining a lot of traction, primarily because these are much cheaper to produce.”

From Hardware to Intelligence Platform The pivot enabled a broader strategic evolution. “We’re no more a smart card company,” Shariq notes, “but we’re kind of providing retail intelligence, giving retailers the ability to think of their stores like an ecommerce website.”

This transformation went beyond cost reduction. By rethinking their hardware approach, they could focus on what really mattered: “We started leveraging computer vision to understand consumer behavior, started to understand your aisle traffic, the pattern at 08:00 a.m. versus at 09:00 a.m.”

The Strategic Lessons Veeve’s response to the supply chain crisis offers several key insights for hardware startups:

1. Look for simplified alternatives to complex hardware solutions
2. Consider modular approaches that can adapt to different market segments
3. Use hardware constraints to drive platform thinking
4. Focus on the core value proposition rather than specific implementation

The broader lesson is about turning constraints into advantages. Rather than just trying to solve the immediate cost problem, Veeve used it as an opportunity to rethink their entire approach to the market. The result wasn’t just a cheaper product – it was a more scalable business model.

For hardware startups facing similar challenges, the message is clear: sometimes external constraints can force innovations that wouldn’t have emerged otherwise. The key is to look beyond the immediate crisis and ask how these constraints might lead to better solutions.