
The Hardware Renaissance - nqureshi
http://paulgraham.com/hw.html
======
tptacek
As I understood it, from having worked at a (successful) startup that sold
hardware, the big problem with hardware isn't that it's hard to make. Rather,
the two big problems are margin and, worse for a startup, inventory costs.
Airbnb can add 1,000 new customers with no infrastructure changes, but for a
hardware startup to take on 1,000 new customers, someone will have to finance
the inventory, and someone will need to predict the amount of widgets to stock
in that inventory, and that gets very expensive quickly.

I don't know how much the inventory issue is mitigated by the fact that YC
companies with working offerings seem to be immediately able to conjure up
500k-1MM in funding.

Also, YC's major successes haven't been hardware companies, have they? The
last essay I read before this one suggested --- in agreement with the
conventional wisdom of VC's --- that a company needs to be Dropbox-successful
to move the needle for YC. Not that YC isn't, I'm sure, thrilled to have
hardware product companies with traction in their portfolio.

Let me just add a banal point: YC's business strategy is, obviously, "throw
everything we can at the wall and see what sticks". If you're considering your
first company, that's probably not _your_ best strategy. Even putting aside
the big-ticket problems like inventory and margin, there are a lot of other
things that suck about hardware: lead times, managing supply chain, QA and
managing defects, field recalls, shipping. These problems are so big that
major hardware companies have people who don't just have one of those tasks as
full-time jobs, but are also famous for being able to deal with them.

~~~
pg
I'm talking about a new trend. The hardware companies we've funded haven't had
time to grow into Dropboxes. But as I wrote, hardware companies are
overrepresented among the most promising startups from the summer batch, as
far as we can tell this early.

True, hardware involves lots of schleps. But that means good ideas of this
type are often lying around in plain sight, while all the other would-be
founders are fixated on making the latest mobile social commerce app.
(<http://paulgraham.com/schlep.html>)

~~~
cs702
I've sensed a bit of a trend (e.g., with YC startups like BoostedBoards and
Double, and popular KickStarter projects like Ouya), but I'm having a hard
time wrapping my head around the capital requirements and ultimate
profitability of these startups as they attempt to scale up into larger
businesses. Maybe I just have to shake off naive preconceptions about hardware
businesses being hard and difficult-to-pivot.

pg: if possible, I'd love to read your thoughts on how the economics of these
businesses might evolve as they attempt to grow, especially as compared to
software-only businesses.

~~~
001sky
The path-dependency (or difficulty of pivot) is an interesting angle.
Certainly worth considering. Most product needs iteration if not outright
pivoting. Perhaps the mitigating factor is that if the product is tangible,
the need is also. SW is so powerful, as a concept, that i wonder if SW some
startups may suffer from "too many degrees of freedom". Thus the ~inevitvble
pivot -- combined with the ability to re-purpose a core of valuable skill-- is
almost a more inherent characteristic of SW startup vs HW one. When considered
in context of problem solving and product/market fit, &tc.

~~~
cs702
The issue, as I understand it, is not so much path-dependency per se, but the
_long lead times_ involved in the manufacture of new hardware at scale.
Software has path-dependency too, but changing source code to modify a new
software product is faster than changing physical machinery, processes,
materials, suppliers, and logistics to modify a new hardware product.

~~~
001sky
This is a good comment, and sheds more light on the subject. The long lead
time is a question of agility. This is subtly but importantly different that
path-dependency (considered more of a lock-in to an existing technology). The
link is that the ways of making the company more agile (investing in
specialized manufacturing/prototyping and/or inventory) tend to create a more
path-dependent trajectory (or opportunity set). So, perhaps this is better
said that HW has _'interial' dependency on initial trajectory_ if not true
_path dependency_ per-se. Even provided that the startup is low-
capital/outsourcing model. I hope this does some justice to incorporating your
point.

~~~
tty2020
Nice comment. I think there is indeed an inherent "inertial" in hardware
business. A software/website service can have different usage. Users may
prefer to use a smaller part of the service, or using the main service for
purposes not originally conceived by the creators. In this way there is a
chance of pivoting. However a piece of hardware has a very focused usage. All
parts are integrated to provide a single function for the user. Also, unlike
software, there is no straightforward way to collect real-time data on how a
user uses their hardware.

------
mixmax
15 years ago I did a hardware startup, development was extremely hard and I
woved never to do a hardware startup again.

Now I'm not so sure.

Our problem was twofold: First hardware development was not generally
something you just did in your sparetime, it was for the big boys. This meant
a lot of convoluted processes for dealing with suppliers, expensive and
unreliable dev kits and tools, long lead times and all sorts of other hassles.

Second the turnaround time for a prototype was at least two weeks. If you made
a small mistake you'd find out two weeks later when your prototype arrived.
This adds up quickly and slows you down tremendously. Not because we made a
lot of mistakes, but we had to be absolutely sure that something worked before
sending it off to be prototyped. No testing a new idea in an afternoon or two.

These things have totally changed with the commodisation of hardware and the
looming 3D revolution.

With a makerbot, a raspberry Pi, an arduino and a shelf full of components
you're prety much ready to go and can hammer together a working prototype in
no time. If you feel cheap you can buy a nice box for your arduino and call it
a finished product.

~~~
jpdoctor
> _Second the turnaround time for a prototype was at least two weeks. If you
> made a small mistake you'd find out two weeks later when your prototype
> arrived._

[Cue Four Yorkshiremen]

Try an fabless IC company: 8-10 week turn times on fabrication, each run was 6
digits $.

~~~
arbuge
Indeed. I used to be an ic designer... 2 weeks turnaround would have been hog
heaven.

As for money, some of our runs were 7 digits expensive. Very painful.

------
jgw
It's quite curious how hardware design lost its cachet.

When I was in Computer Engineering at Waterloo (class of '98), many of my
classmates were vying for coop jobs in FPGA, ASIC or board-level design. I
happened to be one of the lucky ones and it set me on a path to a career in
ASIC verification.

Today when I look around at my industry, it's downright shocking how little
young blood there is around. The youngest ASIC guy I've met in the last 6 or 7
years had a Master's and three years experience - and we all regarded him as
the newbie.

Only in the last few months have we seen the occasional new-grad's resume
cross our threshold. I'd not yet call it a trend, but I hope it becomes one.
We have horrible languages, horrible libraries, horrible tools - a huge, shaky
mess of infrastructure built on technologies stretched far beyond what they
were originally built for - and it's so deeply entrenched that few of my
colleagues seem to recognize it. We really need a new generation of fresh
perspectives to shake us all up.

Let's hope it is indeed a new renaissance that Mr. Graham heralds.

~~~
btilly
I have a friend who has been trying to convince me that it is feasible to
create a language that can let a general purpose programmer write useful
software and "compile" it down to a FPGA to run really, really fast. (He has a
lot of specific thoughts that I won't share about what such a language should
look like.)

In principle he thinks that it should be possible to compile such a language
down to an ASIC representation, but that would only make sense for very high
volume runs. (He's specifically interested in software to run financial
models, so those would not be high volume runs.)

He makes sense to me, but I have no idea what practical difficulties there
would be. But does something like this sound doable in principle from your
point of view?

~~~
jgw
There are a number of solutions that do that kind of thing _to a degree_ \-
and they are improving. For certain types of designs, you can actually compile
fairly unrestricted C and C++ into gates that are faster and lower gate-count
than hand-coded Verilog designs. Your friend's domain might well be one of
them.

I think you need some specialized knowledge to use this existing generation of
tools, but having never used such tools, I couldn't quantify that.

I'm also not sure how well these tools perform on arbitrary hardware designs.

But no - I certainly don't think he's out to lunch.

~~~
btilly
The problem is that C and C++ do not implicitly parallelize well. To get
maximum bang for the bunk you want to extract lots of parallelism. Which
requires a different kind of language.

The interesting flip side is that if you design for easy parallelism, you are
better able to take advantage of multiple cores in standard CPUs. Also you can
then turn it around and also distribute the same program across a cluster of
commodity hardware on the cloud.

But yes, the toolchain matters. A lot.

~~~
ableal
> maximum bang for the bunk

That ranks up with "rear-window defrogger" and "string-loaded door" in my
collection of amusing typos ...

~~~
btilly
Oops.

I will have to look for an opportunity to use it on purpose.

------
robomartin

      "And in particular, don't be deterred from applying to Y
       Combinator with a hardware idea, because we're especially 
       interested in hardware startups."
    

How are you planning on funding hardware startups? From your site:

    
    
      "Usually $11,000 + $3000 per founder. So $17,000 for two
       founders, $20,000 for three or more. Occasionally we
       invest more. The goal is usually to give you enough 
       money to build an impressive prototype or version 1, 
       which you can then use to get further funding."
    

A real hardware startup would require at least an order of magnitude more
money than this. Unless they walk in with all the required tools, you could
burn $20K just in software licenses (Solidworks, Altium Designer, Xilinx
Foundation, Keil, etc.) and not have much left for other stuff. Heck, my DSO
alone cost me about $20K. The computer I am typing this on probably has $50K
in hardware and licenses on it.

I could personally consider the idea of presenting a hardware startup to YC,
but I would need to know that this is not about (with the utmost respect)
finding a few starving 20-year-olds that will kill themselves for a $20K
investment. From my vantage point, if you are not throwing $250K+ into a
hardware startup it just isn't going to happen. Of course there are exceptions
to every rule. Then again, this ain't my first rodeo.

Now, if the idea is to throw some money at a project to cobble-together a
smoke-and-mirrors prototype and then go raise a few million, well, for the
right project this could work.

Again, I say the above with respect for what you do. I have done a lot of
hardware/software/multidisciplinary development. It's very different from pure
software web/mobile startups. Very different.

~~~
tomkinstinch
This is an important point and needs to be addressed. $20k doesn't go very far
at all in the hardware startup world.

That said, it is possible to be frugal--to a point. My team and I try to use
inexpensive solutions where we can. We're using Rhino instead of SolidWorks
(OK until we need the hardcore simulation functionality), KiCAD instead of
Altium (same, until we need the simulation), MikroElektronika's C compiler for
ARM rather than Keil, MeshCAM rather than Mastercam, a cobbled together kit
CNC mill rather than "real" mill, a Chinese-made laser cutter rather than an
Epilog, and a wide array of machine shop equipment sourced from Craigslist.

Our product also touches biotech, so we have outrageous reagent costs too. We
still have shell out for antibodies, fluorescent probes, proper biosafety lab
space, etc.

I'd love to see YCombinator comment on accepting biotech/healthcare companies.

~~~
robomartin
As you said, to a point. In my experience some of the approaches to frugality
can quickly become counterproductive and eat away critically needed
development clock cycles.

Here's an concrete example: I made due for years with cobbled-together CNC
equipment of various kinds. I bought an old Bridgeport CNC mill really cheap.
Within a month of use the spindle transmission had to be rebuilt. It did not
have an automatic tool changer or tool probing. After that I took a Bridgeport
knee mill and converted it to CNC. No tool changer or tool probe. It did OK.
Both of these represented HUGE time drains and detracted from the main mission
in major ways.

Later on I decided to do it right and leased a Haas VF6-SS. If I remember
correctly the lease ran about $2,000 per month. Best decision I ever made. All
of a sudden CNC was not a research project. The thing just worked and it could
work 24/7 if required. It had an automatic tool changer and automatic tool
probing. When properly married to Solidworks and a CAM program the setup was
smooth as silk. This improvement in productivity was well worth the $2,000 per
month and other costs (tooling, setup, training) in that it quickly returned
everyone to being focused on what we were actually trying to design rather. It
also opened-up design possibilities that did not exist before this machine
arrived due to what was lacking on the cobbled-up machines (fourth axis being
one example).

That's not to say that I am not for being frugal and creative whenever
possible. For example, we used the CNC machine to manufacture custom assembly
tooling that would have cost tens of thousands of dollars to purchase. We also
made our own sub-table for the machine and saved tons of money.

~~~
tomkinstinch
Thanks for the recollection. I'd love to have the space/budget to lease a Haas
machine. :)

------
austinlyons
"We know there's room for the next Steve Jobs"

I'm not sure if hardware hackers want to be Steve Jobs... they want to be Woz!

"Woz soon followed with the machine that made the company, the Apple II. He
single-handedly designed all its hardware and software—an extraordinary feat
even for the time. And what's more, he did it all while working at his day job
at Hewlett-Packard"

<http://www.foundersatwork.com/steve-wozniak.html>

~~~
kbutler
But investors would much rather fund Jobs than Woz.

------
jd
If pg is correct and hardware startups are making a renaissance then we can
expect to see startups soon that sell shovels for hardware startups. For web
startups we see shovel-style products that help with customer support, A/B
testing, virtualized servers and so on.

In the same way we can expect startups to pop up that make life easier for
hardware startups. For instance startups that make prototyping hardware
easier. Or that simplify shipping goods all across the globe. Or startups that
make it easier to find the right suppliers and get good deals with them.

Pretty exciting!

~~~
pg
We've funded several.

------
SiVal
Don't know why hardware is suddenly rising like a phoenix? One word: Apple.

Apple used to talk about ease of use and "computer for the rest of us", and
they still throw some of that into every presentation, but it's no longer the
lead. After Steve Jobs rejoined Apple, it was all about the look and feel of
the hardware, not ease of use of the software. "Look, candy colors!" "Look how
small! Feel how light! Look at those curves! Oooh, you can never be too thin.
Did I mention thin? I meant thinnest!"

Then the small, thin, candy-colored devices emerged, and they made Apple the
most valuable company in the world, with the media hanging on its every move.
And what are they talking about, the software? No, silly, a Windows machine
can do anything a Mac can do. Apple wouldn't be so successful without the full
package of hardware, software, and services, but it's the HARDWARE more than
anything else that everyone talks about.

This has given Google, Microsoft, Samsung, and other big companies serious
Apple envy, which shows up in their "strategies". How can it not affect small
startups as well? It's the environment these little companies are born into.

------
anigbrowl
_And in particular, don't be deterred from applying to Y Combinator with a
hardware idea, because we're especially interested in hardware startups._

This is great news. I felt a bit old and stupid at Startup school, because I
want to make hardware (albeit for a niche rather than a mass market), but
anyone I talked to seemed to find the idea weird and most of the concepts from
the stage were along the lines that software - particularly internet software
- was, is, and ever shall be the sole basis of a successful startup. It was a
relief at the end of the day to hear Joel Spolsky discuss the viability and
possible desirability of building a nice little $10m company in just as much
detail as building a $1b one.

------
tocomment
I'm still struggling to understand the logistics of starting a hardware
company.

Let's say I have an idea for a portable mini-fridge. What kind of engineers do
I need to contract to design it? Where do I find them? Do I need approval,
testing? What kind of regulations do I need to follow? And finally how do I
get it manufactured? Do I actually need to go to China and meet with
factories?

I wish someone would put together a step by step guide for these kinds of
questions.

~~~
kerryfalk
Regulations differ across different industries and most have an industry
association that you can become a part of to do research. Manufacturing is
very old-hat in North America.

Truly rapid prototyping is bringing costs down, like a great dev framework
cuts dev time down.

There are many possible paths to succeeding in manufacturing, one size does
not fit all. It largely depends on A) what you're trying to build; and B) who
you're going to sell it to.

For example, if you're going to sell to consumers you're most likely going to
have to come up with capital to cover your manufacturing costs before you have
a single unit sold.

If you're selling to businesses you might be able to get a Letter of Intent or
a Letter of Credit and then get a bridge loan to cover the costs. If I were
building a manufacturing company, this is probably the route I would take.

Like software though, you need the right people. Good mechanical engineers are
as rare as good software engineers and the programs they use in their craft
are far more expensive (SolidWorks, etc.). You'll also probably need an
Electrical Engineer. It's kind of like the difference between front-end/back-
end devs.

------
amirhirsch
The trend towards more hardware-product startups in the sf bay area is real
and there is more evidence than just the increase and quality of yc hardware
companies that pg wrote about. There are new hardware focused incubators (like
Lemnos Labs), more hardware hackathons, and there's been growth in the sensor
and hardware meetups for the past couple years.

However, it's possible that innovation in hardware technologies is out of
reach of startups. I'm differentiating here between hardware-tech and
hardware-product startups. Of course there are hardware startups that are
attempting to bring new technology to market (go Integrated Plasmonics, and
3Scan!). Interestingly, a good indicator of whether a startup is developing an
innovative technology is that Peter Thiel is invested in it--many of his fund-
ees are slaving away in labs scattered around SF. The failure modes of these
hardware-tech companies will be more interesting than the hardware-product
startups. These companies may take a much longer time to develop tech, then
the product using that tech, and then fail, because the market they try to
disrupt with their technology may be disrupted by other technologies with
better economics--energy tech is full of these sorts of baby elephant
skeletons. Still, successful investment in real hardware innovation that wins
leads to companies like the next GE, Intel, or AT&T so it makes sense for
investors with deep enough pockets to aim for these.

Hardware products that simply integrate existing commodity components (like
Blossom Coffee) have a pretty well understood binary risk profile, they either
they hit or they don't. The new hardware renaissance PG is observing is based
on the reduced cost of production, and new ways to crowd fund these sorts of
companies: things you might prototype in TechShop (shared tools space) and
sell via Kickstarter.

------
femto
I'd suggest that there is a huge opening for a startup that does manufacturing
process. This company could earn money by selling its process to others, and
dogfooding its own product in a few lucrative niches.

For example, the company might start by pulling all the open source EDA, CAD,
CNC, and similar, software into a cohesive whole. It would then bring in one
of the open source ERP systems and integrate it with the engineering
toolchain. Keeping on doing this for every part of the process: ordering,
inventory, manufacturing/robotics, testing, sales, distribution, support,
financials. The idea is to (as nearly as possible) completely automate the
process of scaling hardware based business from a prototype to a product.
Achieve this goal and hardware becomes as easy to scale as software.

I've been building hardware for the last 30 years, and invariably most of the
work goes into making the process run smoothly (ie. designing the process)
rather than designing the product.

------
macrael
I think it's fascinating how much money people are willing to pay for hardware
compared to software. It's hard to convince people to pay _anything_ for
software, but these kickstarter projects are getting lots of people to pay
hundreds of dollars for hardware.

~~~
001sky
_it's fascinating how much money people are willing to pay for hardware_

\-- Sometimes there are social resons for this.

Tangibility. Evident complexity. Somthing to show off/talk about. You can sell
art-work to hang on the wall for a much higher price than a digital file only,
etc. (Software's intangibility and ease of replication in these cases are not
per-se advantages.)

------
Kilimanjaro
Toys, toys, toys!

It's all about toys!

I want to see iPhone controlled toy tanks with cameras and laser sensors, so
me and my brother can kill each other without moving away from our desks.

I want to see usb telescopes, microscopes, thermometers, stethoscopes so my
kids can play scientists.

I want to see more e-toys so kids grow more interested in technology.

------
3pt14159
Patents. That is what is stopping hardware. Go ahead and try to have something
listed in Best Buy without having an army of lawyers breathing down your neck.

Every. Single. Hardware. Startup. I know, has either gone bankrupt due to
lawsuits, or hasn't ever reached product market fit.

------
follower
BTW the "applying" link is 404.

It's linking to
<[http://ycombinator.com/apply>](http://ycombinator.com/apply>); instead of
<[http://ycombinator.com/apply.html>](http://ycombinator.com/apply.html>).

~~~
pg
Fixed, thanks.

------
waterlesscloud
"So if the ease of shipping hardware even approached the ease of shipping
software, we'd see a lot more hardware startups."

So what kind of startup can facilitate that change?

~~~
MattGrommes
I'm a software guy at a hardware company so I know a little about this. From
my perspective I think there's room for a startup that acts as a kind of
project manager for the actual "making the physical stuff" part of a hardware
company. A group of people that knows the companies who do make circuit
boards, design the enclosures, produce the plastics, get FCC/UL/etc. signoff
if needed, all that kind of thing. It's all well and good to have a great idea
for some piece of hardware but you're going to get screwed on price and
timelines if you don't know the right companies to make the stuff for you and
it's a pretty complicated process.

~~~
adj
There is a company called Dragon Innovation who do just this:
[http://www.wired.com/design/2012/06/dragon-innovations-
manuf...](http://www.wired.com/design/2012/06/dragon-innovations-
manufacturing-in-china/)

There is also an interesting podcast on the process:
[http://theamphour.com/the-amp-hour-113-sudden-
sinoamerican-s...](http://theamphour.com/the-amp-hour-113-sudden-sinoamerican-
synthesis/)

------
hansc
Actually, I did bootstrap a hardware product: www.growguard.net. Agree, it's
not the best looking product, but engineering, designing and puting it in
manufacturing cost less than 5k!

A couple of years ago, I was the CTO and cofounder of another hw startup (FTTH
space), we did get this thing off teh ground for less than 300k and it is now
doing very well and one of the top-3 in it's niche

~~~
GFischer
It looks really cool, and I'm extremely impressed that you did it for less
than 5k.

I think I found an interesting problem to solve, and while I'm looking at
software-only solutions, I believe that it would be better solved by (simple)
hardware.

Your post gives me some encouragement to try it out :) (not right now, but I
think I'll be in position to do it next year).

Edit: I see you had both a "Show HN" and a blog post, it's a shame I didn't
see them earlier and they didn't get traction here.

Show HN:

<http://news.ycombinator.com/item?id=4474132>

Blog Post:

[http://hwstartup.wordpress.com/2012/09/07/how-i-
sold-2000-of...](http://hwstartup.wordpress.com/2012/09/07/how-i-sold-2000-of-
my-electronics-in-one-day/)

------
mahyarm
I think Shenzhen is more the hardware SV than the bay area. Or more "Designed
in California, Made in China". Look at this article by bunnie huang
illustrating this fact:

Akihabara, Eat Your Heart Out <http://www.bunniestudios.com/wordpress/?p=147>

------
state
I find these essays really refreshing not only because of their content, but
because they're evidence of someone searching for points of uncertainty and
investigating them. PG seems to be always looking for what does not make sense
and trying to figure it out.

------
guelo
pg didn't mention China but I think the increasing ease of accessing Chinese
manufacturing is hardware's AWS equivalent.

------
dccoolgai
This is a good read with some great points... more and more people are coming
into the fold and realizing what you can do with platforms like the Arduino in
the space of physical/embedded computing. _This_ is where real innovation is
happening. Coming from a software dev background, I picked up an Arduino about
a year and a half ago - and it is _awesome_...it's just so much fun...it's
like the feeling you get when you make a great web app but times 100 because
it's a _real physical thing_ that moves, senses the world around it and lights
up (or whatever). Even if you don't believe it's the "next big thing", if you
are a sofware dev, you should get into it because it's so much fun and it
makes you better developer when you learn about things about digital logic
like shift registers.

<editorial_hyperbole> I really think the culmination of all this will be what
I see as the next logical step after "mobility" in computing (i.e. the idea
that you "take your computer everywhere with you"): "ubiquity" - or, in other
words, the idea that _everything_ around you - the table you are sitting at in
your restaurant, the walls in your office, things that farm your food and
control your air conditioner, are computers..and perhaps the most exceiting
thing is that this next revolution will (hopefully) be ushered in and
controlled by startups. Exciting times. </editorial_hyperbole>

------
jncraton
It seems like the unification of hardware and software (as Apple has done) is
where a lot of real value lies. I'd love to see more startups selling
innovative hardware/software products.

~~~
khitchdee
I agree. If you're not scared of designing hardware and you have been exposed
to software, it puts you in a position where you can build a physical object
and also program its behavior. You can begin product level design just as a
big player like Apple does with its large dedicated teams. With the advent of
SOCs, its possible to do most of the hardware side of the design at the chip
level. So if you can combine SOC design with high level programming (if
needed) you have everything you need to holistically design a gadget. Can one
person do this? Yes, I think so. As designers, with the kind of support we are
now getting from SOC design tools and software development tools, the only
thing missing is your product level idea and your desire to execute it. If you
do this a few times, it almost becomes as simple as writing software. This is
why I agree why with Paul, we truly are at the threshold of a renaissance in
hardware product design.

~~~
jkestner
If you're doing something approaching consumer hardware, no, one person can't
do this (until someone does, of course). Being good at the quadrant of
hard/soft and design/engineering takes a da Vinci, and he didn't mass produce
any of it. Apple still had to hire an industrial designer to put a case on
Woz's work. But two people, yes. :)

~~~
khitchdee
If you start a startup based on a hardware gadget idea, you can do the initial
design of both the hardware and the software and then as you grow you can farm
out parts of the process. I am not suggesting you would build a whole gadget
all by yourself, but rather that you can conceptualize and drill down into the
initial stages of the design enough that you can get your company started with
a hardware idea.

Of course we are assuming you are not scared oh hardware(chip) design and you
have a background in software. So it would require someone comfortable with
both software and hardware. A lot of the students studying Electrical
Engineering take up jobs as software engineers. These kinds of people would
fit the bill.

------
nickpinkston
This is great that PG is talking Hardware Startups - I seem to remember him
being less than enthusiastic before, but either way I'm glad that he's seeing
a lot of the same things we on the ground are seeing.

A few months back I announced on HN that I started a
<http://www.reddit.com/r/hwstartups>, so I wanted to mention that we're
growing a pretty good community over there as well.

------
johnmurch
I am surprised there was no mention of the Rapsberry Pi. Open sourcing
hardware and allowing one to build their own "widget" is a game changer. You
don't have to know about board layouts anymore, you now have a product/package
ready for production that is $25/$35 that has HDMI, 2 usb (easy wifi enabled),
ethernet, and audio. Just build software and put on SD card.

There are a TON of software products you can build off of this and sell.

------
dschiptsov
Time to resurrect and rethink hardware Lisp Machines as a servers of content
like this site?)

Hardware machines are much better than Virtual ones..)

------
capex
One of these hardware startups would grow into an YC of its own. If a hardware
incubator can solve the problems of inventory, distribution and shipping, it
would pump out products at a much faster rate, with a higher chance of
success. You don't doubt Apple's newest product for a reason.

------
etanol
I have the funny impression that, before, hardware was taken for granted,
i.e., people bought the Comodoer64 to code in BASIC.

Now seems that software is taken for granted, e.g., you download TCP/IP
Arduino implementations to connect your circuits to a LAN.

------
bsahr
Did anyone else find the bottom line about the (250 word) piece being reviewed
by 7+ folks a bit excessive? Honest question. Just feels like a very heavy
burden to meet before getting public word out on an idea.

------
ErrantX
_Physical things are great. They just haven't been as great a way to start a
rapidly growing business as software._

The same issue applied to software not all that long ago. As with software,
the wide availability of consumer-level, cheap or even free tools to make
stuff is driving a renaissance for hardware.

And with so _much_ hardware hacking then, as with software, some will see
explosive growth.

It's good to see in my mind because hardware can be infinitely more
important/useful than software.

------
saurabhpalan
I am just glad YC is realising the potential of HW companies. Being a Hardware
Engineer, I have been feeling out of place in Silicon Valley Startup Scenes.

Hope that trend changes soon.

------
DanBC
People have mentioned lead times in this thread. Just so I can calibrate my
expectations - what do people reading HN consider to be a "long lead time" for
hardware?

------
padobson
Amazon Web Services has been an integral part in opening up the web to the
glut of software startups we've seen over the past 10 years.

Fulfillment by Amazon[1] could be a big part of the rise of hardware startups.

Couple 3D printing with a logisitics powerhouse like Amazon, and hardware
could be as easy to deploy as a webapp soon.

1\. [http://www.amazonservices.com/content/fulfillment-by-
amazon....](http://www.amazonservices.com/content/fulfillment-by-amazon.htm)

------
tty2020
Difficulties of a hardware startup, compared to a software one, is mainly of
storage, selling channels and after-sales services. The inability to iterate
quickly is also one of its problem.

Unless someone come up with a solution for these problems, I don't see a
renaissance of hardware in the form of many startups (but can be in other
forms, since now Win 8 is encouraging hardware creativity)

------
gruseom
Coincidentally, HN's own robg just posted his new hardware startup here:

<http://news.ycombinator.com/item?id=4689244>

Personally I think the biofeedback thing sounds very cool. I ordered a
biofeedback device from some outfit a few years ago and never came close to
getting the thing to work.

------
riffraff
> And one of most conspicuous trends in the last batch was the large number of
> hardware startups.

OT, but please be kind to a learner of the english language: should that
sentence be "one of _the_ most conspicuous" or there is some rule by which the
article can be used or not in this form?

~~~
delinka
Looks like a typographical error to me, a native speaker of the American
flavor of English. You are correct that the article is required here.

------
hnriot
I'm not sure 8% is really indicative of any trend, also I think the sample
size is way too small to draw any kind of conclusions. And no examples of what
this 8% are up to, at least in broad terms?

If you look at the bigger picture, rather than the little world of YC you'll
see lots of hw in medical, aviation, military, communications etc etc.

Saying that the number of companies that would be attracted to YC for money
has risen from X to 8% doesn't really speak of any trend.

There are some examples from kickstarter that spring to mind, like for
example, Brydge (bluetooth keyboard/speakers for iPad) and the game controller
world has its fair share of hw innovation (like Connect for example) but real
hw innovation is out of reach of startups, you need chip fab plants and cross
disciplinary skills that are expensive and locked up in the big company r&d
departments. The real companies doing hw are not going to YC for money, they
go to their boss.

~~~
hollerith
>real hw innovation is out of reach of startups, you need chip fab plants

That's a bit hyperbolic. Even Apple doesn't fab their own silicon.

------
jwr
It's impossible to bootstrap a hardware company. You need capital, otherwise
you'll never get out of the tar pit that is small-scale production. So
hardware companies will always be much harder than software companies, if only
for this reason.

------
capkutay
Good observation. On top of that, it may be nice to find a solution where you
can easily monitor data flowing out of electronic devices in real time.
Certainly a lot of software products you can build on top of the coming
hardware era.

------
SeoxyS
This article serves as a perfectly timed confirmation of my plan for what I'll
do next, once I've achieved everything I can where I am right now.

I've been planning to apply to YC and start a hardware-focused startup in the
home-automation space.

------
fieldforceapp
pg, do you have a quantified list of hardware startup business models that you
can share? For example, as a startup, what are the realistic sales &
distribution channels that we can model, financially?

What we're worried about is designing the wrong product at the wrong price for
what seems like a limited set of distribution channels with some rather
onerous fixed costs and low margins -- certainly compared to software/SaaS
sales. How do you wade through that swamp?

------
andyjsong
What would be the advantages of applying to YC rather than Lemonos or a
hardware specific incubator? I would think initial pool of capital is the
biggest hindrance.

------
iag
PG, thoughts on this?

"How I Plan to Bootstrap Aspiring Hardware Engineers"

<http://news.ycombinator.com/item?id=4691108>

------
peterjs
Which would be the companies mentioned in the essay? I have tried to search
for a list of yc companies, but the sites I've found were quite outdated.

~~~
twog
Double and BoostBoards come to mind.

------
antonp
The interesting question is in which industries will we see the first Twilios,
Stripes and Clevers for hardware? Home automation? Cars? Health?

------
known
I think it may eventually boiled down to <http://www.aliexpress.com/>

------
kyro
Great, now I've got to learn electrical and mechanical engineering. Where's
the Rails for hardware?!

~~~
dccoolgai
It's called Arduino.

~~~
randomdata
Well, a train is the most likely place to learn about the combination of
electrical and mechanical engineering that is found on rails. The Arduino
isn't a bad place to expose new people to electronics though.

------
skarmklart
How about combining hardware gadgets with the SaaS model? Will HaaS be big in
the future?

------
itsnotvalid
Now I need to learn design of PCB...

------
tteam
Spot on PG. I think we are qualified to add value to this discussion here. We
have bootstrapped our plug device (TonidoPlug) couple of years back. Lot of
people ridiculed and cautioned us when we have started. Now it is one of the
top rated NAS product in amazon without any recognizable brand name. We have
built the entire software stack around it. Now, We OEM our software stack to
other Consumer Electronic companies. We have done all without any external
investments. Also there are fundamental changes happening in the industry that
will aid provide impetus to the growth story. 41% of CE sales are done via
online now. So we don't need to pay hefty margins required by Best Buy OR
other brick and mortar companies. We can sell directly to end customers and
pay the amazon sales tax :)

Also many CE companies (Exception of Apple) stopped innovating or don't have
access to the exceptional software skills. Typically they buy units from
Taiwan ODMs, buy software stack from companies like us, put their brand and
sell to their existing channels(Staple, Best Buy). There is no value addition
provided by these companies in the entire supply chain except their
distribution. Now even the distribution is coming under attack because of the
direct sales model. For instance we ship units to more than 75 countries.This
situation is so true when you take a look at home networking products
(Consumer Routers, NAS, DVRs). You can do a heck a lot of innovation there and
people use it daily.

Now we are sitting with exceptional know-how, ODM relationships, a software
stack that can run on all the embedded device (Routers, DVRs to NAS products)
and mobile apps on all the popular mobile OS'es. In couple of years we can
challenge the incumbents and build a company that can generate 50-100 million
in sales and challenge the incumbents. Even if the margins are tight, we can
still make at least 20% net margin. We are ready to accept investment from YC
if PG is interested.

~~~
tty2020
Thanks for your sharing. You sell through online channels? How do you deal
with storage and after sales services?

------
adv0r
at the Dublin websummit an hardware startup (smartthings) won the competition,
confirming the tendency.

