October 2012
One advantage of Y Combinator's early, broad focus is that we see trends before most other people.
And one of the 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.
Our broad focus surfaces trends early, and the loudest last batch was hardware: 7 of 84 companies, doing better than the rest.
YC's broad focus surfaces trends early, and the loudest one this batch was hardware: 7 of 84 companies, doing better on the whole than the rest.
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.
Investors resist hardware, but their opinions are a trailing indicator: the best founders see the future better than investors, because they're making it.
Investors have a deep-seated bias against hardware, but their opinions are a trailing indicator; founders see the future first because they're the ones making it.
There is no one single force driving this trend.
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.
No single force drives the trend. Crowdfunding, tablets, better motors, ubiquitous wireless, easier manufacturing and prototyping, and online retail all lower the barriers at once.
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 [blocked] 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.
Why is hardware suddenly cool? It always was; it just hadn't been as good a way to start a rapidly growing [blocked] business as software.
But that rule dates only from about 1990 and may not last. Hackers love building hardware and customers love buying it, so if shipping it approached the ease of software, we'd see far more startups.
Hardware was always cool; physical things are great. It just stopped being a great way to start a fast-growing business around 1990, and that advantage of software may turn out to be temporary.
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 [blocked].
But there's almost certainly also room for the first <Your Name Here>.
It wouldn't be the first time a bad idea stopped being one, nor that investors learned that from founders. So don't let the fear of discrimination deter you; apply to Y Combinator, since we're especially interested.
We know there's room for the next Steve Jobs [blocked]. But there's almost certainly also room for the first <Your Name Here>.
It wouldn't be the first time a bad idea stopped being one, or that investors learned it from founders. So don't be deterred, and apply to YC.
Thanks to Sam Altman, Trevor Blackwell, David Cann, Sanjay Dastoor, Paul Gerhardt, Cameron Robertson, Harj Taggar, and Garry Tan for reading drafts of this.
Thanks to the readers of drafts, and a pointer to a piece asking whether a hardware renaissance fits the "software eats the world" story.