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Why is hardware so hot right now?

It seems like hardware startups are popping up everywhere now. The go-to answers I've been seeing are that the costs have come down and crowdfunding has made it easier but it's still difficult to start a hardware company. Would love to hear what other factors are contributing to why hardware is so hot, and why now?

25 Replies

Lawrence Botley
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Lawrence Botley Entrepreneur
Software Architect
its a good question but I think a simpler answer.

Hardware requires cash to bring prototypes to market and funding platforms like kickster have enabled startups to acquire cash and exposure.

Not only is it much easier to raise money to build release versions, but initial versions are allowed to be a little less polished that consumer products due to the nature of expectations.

Of course this coupled with the constant reduction in price, size, durability and power consumption of electrical components such as microcontrollers.

it is certainly a good thing :)
Alison Lewis
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Alison Lewis Entrepreneur • Advisor
CEO/Creative Director
Hardware is hot because of the Internet of Things and because people want something in their life besides a computer screen. Hard, cold, boring objects will die soon, and the world of accessible lifestyle, integrated, communicative devices and fashion will be the future.

Right now everyone wants to control everything with an "app" or so they say. But, someday it will all be seamless and we will argue with our couch and watches about our inactivity or weight.
Chuck Kelly
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Chuck Kelly Entrepreneur
Founder & Developer of Buhz.com | IOS + Android Developer & UI/UX Designer
its definitely the Kickstarter model....not having to convince a investor to give you a million dollars before use sold even 1 unit was probably the biggest roadblock a new hardware start up faced previous to Kick Starter. Chuck Kelly Sent with Sparrow (http://www.sparrowmailapp.com/?sig)
Jessica Alter
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Jessica Alter Entrepreneur • Advisor
Entrepreneur & Advisor
Kickstarter and indiegogo (etc.) are great but look at the stats -http://www.kickstarter.com/help/stats.Only 44 projects have ever raised more than $1M and closer to 750 raised more than $100K. Of those only 158 were technology related at all...so it's not filling the investor gap all that much. It might clear the way for getting a prototype done - costs a lot less but can still be cost prohibitive. It also allows investors to see if there is demand for a product. But a lot of it has just been great PR, which means it's much more visible when things do raise $100-$1M and you only need a few of those to excite entrepreneurs (the Instagram effect).

The other contributing factors:
2) Costs of components have come down
3) community - there is real community growing around Arduino, IoT, makerspaces, etc.
Christopher Cuong T. Nguyen
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Co-Founder & CEO at ADATAO, Inc.
The single biggest driver is that super-accessible Arduino, BeagleBone, Raspberry Pi, etc. have suddenly empowered large numbers of software people to make interesting hardware. The entire pool of entrepreneurs that would have been restricted to trying to create the next killer iOS app is now also available to the next amazing hardware project. More people on something, more smart people + more interesting ideas around it, more hotness follows.

Arduino is to the microcontroller as the iPhone is to mobile phones. The latter has been around a long time, but it takes the right UX/accessibility to blow popularity past critical mass.
Lawrence Botley
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Lawrence Botley Entrepreneur
Software Architect
its an interesting point Jessica, although I think one hand you are saying that its the cost of components that have enabled the influx, but then then suggesting that it takes over a million dollars to build to make it happen.

Obviously project depending but I think its likely for early releases fit for the kickstarter community, a lot less than a million dollars is required :)
Jessica Alter
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Jessica Alter Entrepreneur • Advisor
Entrepreneur & Advisor
@lawrence no just was replying directly to the comment above mine re $1M but it still does take more money than a software company. no question.
Brendan Duffy
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Brendan Duffy Entrepreneur
Product Manager
Ebb, then flow.

First you have the development of a successful hardware form factor, which creates an ecosystem(s) for software to be deployed. People start to develop new and innovative software products for the ecosystem, and at first the pace of innovation is really fast, and the number of players in the ecosystem is relatively small. More software producers enter, and things get crowded. The pace of innovation slows (certainly on a per capita basis, anyway), and it gets tougher to eek out a good margin. People start looking around for the next hot form factor.

Obvious example:
The iPhone has been around since 2007. When it was released, it (a pocket-sized touchscreen computer) was revolutionary. Now, it's commonplace. The associated software distribution channel has somewhere on the order of 1,000,000 apps. The adjacent ecosystem, Android, (same form factor) is equally crowded.

VCs are looking for the next hot hardware form factor, and the outsized margins that it'll bring. (Though sometimes you'll hear them refer to hardware as "software wrapped in plastic" or whatever.)
Alan Peters
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Alan Peters Entrepreneur
VP Product and Technology at BusinessBlocks
I'm a software guy, but I love hardware and have been involved with it on and off for almost 20 years now. Until very recently it's been an easier domain for established companies: the cost-structures and operational challenges were generally non-starters for start-ups. Plenty of small companies played in the eco-system (including one of mine), but typically either as a service provider or an IP licensor. I think Paul Graham's essay on the "Hardware Renaissance" did a good job of hitting some of the high-points of what has shifted: http://www.paulgraham.com/hw.html
Avi Tevet
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Avi Tevet Entrepreneur
Founder of Fitlogr
I think Christopher is spot on... thanks to Arduino, Raspberry Pi, and cheap, good sensors, real amateurs are creating some cool projects in the range of hundreds of dollars.

http://arduiniana.org/projects/the-reverse-geo-cache-puzzle
http://forum.arduino.cc/index.php/topic,8316.0.html (for a weather balloon that costs a few hundred dollars, you can literally send your project to the stratosphere)
http://playground.arduino.cc/projects/arduinoUsers

Another component of the ecosystem is 3d printing - they can be bought for as little as $200. This enables rapid, completely independent casing/enclosure prototyping, which might have taken days or weeks for a shop to turn around.

With so many amateurs already creating amazing projects, the barrier to entry dropping, and the ability to quickly and cheaply refine a product multiple times, there's going to be a lot of people creating great products that others can afford very soon.
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