Before software for the masses was possible I built many custom singles and some very small runs of small devices. Never had the nerve to look for financing to mass produce. At that time the lowest quantity price point for affordability was 1000 units and prices got more reasonable in quantities of 10000 or more.
Maybe nowadays there are different "minimum quantities" than in the old days.
The trad way to seek venture capital (or even a biz bank loan)-- Formulate a detailed biz plan with "hopefully realistic" marketing data. Then shop it around to deep pockets. Which is easier if seeking money for a pizza joint or auto repair shop, because the market and risks are better known.
Even building a thousand analog stompboxes, with nice paintjob, in a nice shrinkwrap cardboard box. Frightfully expensive for a small fry. Maybe nowadays you could sell em on the internet without fooling with dealers and distributors, dunno.
But back then, OK you spent a bunch of money and you have 1000 shiny boxes sitting in the living room. What, maybe roll a wheelbarrow of em downtown and peddle em on the street corner? Take an extended road trip visiting every music store in the nation trying to talk each one into taking on a couple of the boxes? Run expensive advertising? Concentrate making big sales to the big music stores?
Software has some biz costs of course, depending on the marketing plan. But just about any simple box you make, especially if it can attach to a computer or contains a clock, needs FCC testing in USA and presumably about any country requires the equivalent. When working with a company that made midi interfaces, it costed something like $5000 or $10000 lab fees to certify every new design. So far as I recall even minor circuit changes or chassis redesign was sufficient reason to have to pay another certification fee.
If it still costs that much then maybe it would be more profitable to run a testing lab than to build stompboxes!
Unless you can internet direct sell in sufficient quantity nowadays, the sales people are the most important people in the company because if the salesman can't sell then everybody in the company starves regardless how good a job they do.
Unless you can swing a deal with a distributor that will push yer products along with many others, you need to exhibit at NAMM every time which is expensive. A big distributor will always be at NAMM so it would save some of the expense but its a good idea to fly out a couple of yer own folks to help man the booth and talk up the products. Which is thousands of bucks expense every show.
Just lots of money to sell the boxes and lots of money to build the boxes. Back then I was friends with some rich folks and probably could have conned somebody into bankrolling hardware, but the odds of success so low. It is nice being friends with wealthy people. It is not so nice if you manage to get wealthy/powerful people pissed off about a bad biz deal!
