Startups can substantially contribute to the industrial development in the early and newly industrialized countries by transforming technological inventions into products and services. By means of the market dynamics of cooperation and competition in global value creation and knowledge networks, new products and services can conduce to a global industrial development. Hence, in pursuance of an efficient and effective startup development, this paper will present a new methodology for the integrated development of the product and of the business model for a hardware startup. Hardware startups address the development of innovative tangible products. The hardware product itself may consist of mechanical, electronical, and software components. The methodology is based on a micro cycle for the problem-solving procedure on the level of single process steps as well as on a macro cycle as procedure for the overall integrated development of the startup. For each phase of the macro cycle, specific modelling methods for the product and business model are proposed. Finally, a proof of concept on the basis of a student startup, which is developing a micro wind turbine, will be presented.