I find it interesting that so few are working on the actual IoT devices but so many are working on software to support it.
I think you know the answer: generally, hardware is harder than software for a startup. There was a post about a hardware kickstarter project that failed: "Kickstarter project spent $3.5M to finish a prototype and ended in disaster" [1] and a list here: List of Failed Kickstarter Hardware Projects [2]