This post on the Hardware Renaissance by Paul Graham is surely to be of interest here.

[Mr. Gunn]

For those of you who don't already read Hacker News, etc.

http://paulgraham.com/hw.html

[Bryan Bishop]

On Tue, Oct 23, 2012 at 11:49 AM, Mr. Gunn <willia...@gmail.com> wrote:

http://paulgraham.com/hw.html

October 2012

One advantage of Y Combinator's early, broad focus is that we see trends before most other people. And one of most conspicuous trends in the last batch was the large number of hardware startups. Out of 84 companies, 7 were making hardware. On the whole they've done better than the companies that weren't.

They've faced resistance from investors of course. Investors have a deep-seated bias against hardware. But investors' opinions are a trailing indicator. The best founders are better at seeing the future than the best investors, because the best founders are making it.

There is no one single force driving this trend. Hardware does wellon crowdfunding sites. The spread of tablets makes it possible to build new things controlled by and even incorporating them. Electric motors have improved. Wireless connectivity of various types can now be taken for granted. It's getting more straightforward to get things manufactured. Arduinos, 3D printing, laser cutters, and more accessible CNC milling are making hardware easier to prototype. Retailers are less of a bottleneck as customers increasingly buy online.

One question I can answer is why hardware is suddenly cool. It always was cool. Physical things are great. They just haven't been as great a way to start a rapidly growing business as software. But that rule may not be permanent. It's not even that old; it only dates from about 1990. Maybe the advantage of software will turn out to have been temporary. Hackers love to build hardware, and customers love to buy it. So if the ease of shipping hardware even approached the ease of shipping software, we'd see a lot more hardware startups.

It wouldn't be the first time something was a bad idea till it wasn't. And it wouldn't be the first time investors learned that lesson from founders.

So if you want to work on hardware, don't be deterred from doing it because you worry investors will discriminate against you. And in particular, don't be deterred from applying to Y Combinator with a hardware idea, because we're especially interested in hardware startups.

We know there's room for the next Steve Jobs. But there's almost certainly also room for the first <Your Name Here>.





Thanks to Sam Altman, Trevor Blackwell, David Cann, Sanjay Dastoor, Paul Gerhardt, Cameron Robertson, Harj Taggar, and Garry Tan for reading drafts of this.

- Bryan

http://heybryan.org/
1 512 203 0507

[Simon Quellen Field]

Seven out of 84 is a large number?

It looks a little like eight and a third percent to me.

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[Daniel C.]

On Tue, Oct 23, 2012 at 3:54 PM, Simon Quellen Field <sfi...@scitoys.com> wrote:
> Seven out of 84 is a large number?
> It looks a little like eight and a third percent to me.

Compared to the startups people have been putting together since they
became hot, 7 out of 84 is a lot. One of the big things that made
startups hot in the first place is that it's cheap and relatively easy
to write software, and you can distribute it for practically free.
That wasn't true of hardware - designing it (especially iteratively,
since you never get it right the first time) was prohibitively
expensive, and distributing it was problematic and expensive. Those
barriers are starting to come down, so more people are looking to
start hardware-related companies.

-Dan

[Simon Quellen Field]

You seem to be arguing against your case.

If software is easy, then software startups would be an even larger

number than 8.33 percent.

It would be nice to see an actual breakdown.

How many medical startups?

How many web portal / social networking startups?

How many software startups?

How many retail sales startups?

If I developed fungicide-impregnated foam rubber earplugs for

swimmers, would I be a hardware startup, a sports startup, or a

medical startup?

If they had said "surprisingly large" number, that would argue for your

point.

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[Daniel C.]

On Tue, Oct 23, 2012 at 4:10 PM, Simon Quellen Field <sfi...@scitoys.com> wrote:
> If they had said "surprisingly large" number, that would argue for your
> point.

Well, he did say it was a conspicuous trend. I also know that, in the
past, PG has said that he wished more people would bring them startup
ideas that involved hardware in some way, because hardly anyone did
(at the time) and he'd seen a few companies involve hardware on some
level and be rather successful with their startups.

I wonder if he'd forgotten that he said that, and if people are now
bringing him more hardware-related startups *because* he said that,
and if he's misattributing the increase in the number of hardware
startups he's seeing to a trend in the real world when it's really
just people bringing him what he said he wanted.

-Dan

[Daniel C.]

On Tue, Oct 23, 2012 at 4:10 PM, Simon Quellen Field <sfi...@scitoys.com> wrote:
> It would be nice to see an actual breakdown.
> How many medical startups?
> How many web portal / social networking startups?
> How many software startups?
> How many retail sales startups?

Also, Y Combinator pretty much only funds software-heavy (I think the
term they use is "digital") startups. Paul Graham got his first
fortune with a company called Viaweb, which got purchased by Yahoo!
for ~40mil USD and is now Yahoo Stores. He's a programmer with a big
emphasis on Lisp, and that informs his group's decisions on what kind
of startups to fund.

-Dan