IoT- Internet of Things · Hardware

Why is hardware so hot right now?

Neha Palacherla Marketing

September 4th, 2013

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?

Rajesh Lalwani Technologist, Entrepreneur

September 5th, 2013

One big reason hardware startups are more attractive is that there is no debate about the business model. People are not willing to pay for most software apps even those they use everyday like Facebook, Instagram or Pinterest. But when it comes to a physical device, it's suddenly clear to consumers that they have to pay. They don't expect to get a physical device for free unless there is some kind of usage fees like cable box or some cell phones.

Renee DiResta Vice President of Business Development at Haven

September 4th, 2013

1. Ease of prototyping - other people have already discussed the technologies. Open hardware has made it easy to build a First Thing.

2. Access to First Thing funding - Indiegogo/KS are not going to fund a company, but they give entrepreneurs access to working capital to build a first run. 
2a. Social crowdfunding is an easy place to build an early adopter base to facilitate rapid iteration. 

3. China. After making that First Thing, you need access manufacturing. The increasing proliferation of multinational companies devoted to all aspects of manufacturing - sourcing, supply chain management, logistics, fulfillment - mean that while manufacturing is still incredibly complex, it's increasingly manageable.

4. The HW incubator ecosystem. Access to mentorship and a knowledge base. Invaluable. YC may give a founder a network and some buzz, but PCH/Bolt+Dragon/Lemnos give founders access to engineers, tools, and incredible expertise.

Alison Lewis CEO/Creative Director

September 5th, 2013

Yes, technology is cheaper, better, more accessible, and faster; but is that really the reason people start a hardware company? I think it is deeper. 

I would never say I started a hardware company because of "smartphones" or the "maker movement." I would say it was because the feeling of possibility and the excitement of holding what you made in your hands beats any old screen any day. 

To build a hardware company is 10+++ times more difficult with logistics, failures, and manufacturing. So there is something in the human psyche that wants to go through all the challenges to work in this space. The capital intensive expedition of hardware isn't for the faint of heart; there is a boldness and a sense of accomplishment that can be universally understood. 

I would say, let's keep all the good examples (above) and also make sure we are looking at the social and psychological rewards of building a physical good. 

Chuck Kelly

September 4th, 2013

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)

Greg Sherwin vp engineering + it • singularity university

March 6th, 2015

I buck the trend here and will say it's not Kickstarter. Things like Arduino, Raspberry Pi, and the Spark Photon have far more to do with it: commodity electronic frameworks and open source electronic platforms are simplifying a lot of basic device plumbing when it comes to API-driven, Internet-connected things.

The explosion of mobile devices and support for them from the backend has also enabled common software paradigms to more readily replicate out to an ecosystem of diverse hardware and devices. 

Combine that with a semi-saturated market for the purely virtual world, and things that actually have a presence and impact on the physical world are newer and currently more exciting. Pure virtual world tech has its place, but after two decades of shoving Internet bits back and forth, things like sensors and actuators run closer to the "iron" of how we actually live in the real world.

Christopher Nguyen Co-Founder & CEO at ADATAO, Inc.

September 4th, 2013

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 Software Architect

September 4th, 2013

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 Entrepreneur & Advisor

September 4th, 2013

@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 Product Manager

September 4th, 2013

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.)

Avi Tevet Founder of Fitlogr

September 4th, 2013

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.