Hardware, the Ugly Stepchild of Venture Capital, Is Having a Glamour Moment

Focusing on mainly on electronics, I will agree that hardware is having a glamour moment, but not because more funding is available. I am an embedded designer and I work closely with several hardware startups (in silicon valley and other places) ranging from novel LED lighting to data acquisition systems. Every one of those startups had to bootstrap themselves until they were financially viable from sales before they were able to get any outside investments. My sample size is small, however, the data agree five out of five times.

The article is dead on with respect to the falling costs of prototyping, I would also add the falling cost of integrated circuits in general. For example, I can get high quality PCB prototypes for about $30 shipped in one week (5cm x 5cm, two layer, 6/6/6 design rules). This was unheard of five years ago. Furthermore, you can now get a 32-bit ARM processor (which doesn't need many external components) in the same package as 8-bit microcontrollers for about the same cost. You can run a open-source IP/USB/BT stack on those without having to cobble together your own. Having the extra performance available, at the low cost/high integration factor, allows the designer similar agile capability as compared to lean software startups, where you can use available code to prototype first and then optimize after you have your feature set. This makes it easier to develop smarter devices that integrate with a broader software stack, e.g. cloud connected embedded devices.

More correctly, electronics is having a glamour moment. VC money has poured into hardware for a long time, if hardware is more broadly defined to include semiconductors, biotech, etc. There's also quite a few VCs with solid experience in those areas and hardware is all many of them do.

> The old saw in Silicon Valley is that venture capitalists won’t touch hardware investments.

TIL that the old saw is written by someone who's been around SV less than ten years.

I wonder if the author read PG's essay.

http://www.paulgraham.com/hw.html