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I can confirm that this is an extremely challenging time to do a hardware startup. In addition to the supply and freight shortages that are deadly to startups

by nrp 5y ago

I can confirm that this is an extremely challenging time to do a hardware startup. In addition to the supply and freight shortages that are deadly to startups stuck at the back of the line: 1. Travel restrictions make it extremely challenging to evaluate suppliers, do joint development, and bring up manufacturing. 2. A bunch of recent high profile failures have caused VCs to cool on the space. 3. Google, Facebook, Amazon, and Microsoft are all hiring armies of hardware people, making the job market more competitive than it once was. All that said: 1. There’s still no shortage of interesting and worthwhile problems to solve with hardware. 2. Like web companies that survived the dot com bubble bursting, the hardware companies that make it through 2020 and 2021 are going to have been strengthened by it.

bruce343434 5y ago
> A bunch of recent high profile failures have caused VCs to cool on the space. Could you expand on this?
- bombcar 5y ago
  A successful startup allows others to claim that they’re “Uber for pets” which encourages VC money - but if there are famous explosions in the ears all of a sudden you have to explain why you’re not “Wework for chips” which makes it harder to get funding started. When a gold rush is on nobody gets yelled at for buying shovels even if they lose money. But going against “conventional wisdom” requires either entirely independent VC or investors who really trust you.
  - deleted 5y ago
    [deleted]
contingencies 5y ago
4. Certain major contract manufacturers are imploding. 5. China-West tensions, including HK/mainland border being locked down, are creating additional difficulties. 6. Current China anti-platform/monopoly drive has cooled domestic VC activity and appetite for vertical integration. (Full disclosure: Cross-border hardware venture founder in China.)
- baybal2 5y ago
  > 4. Certain major contract manufacturers are imploding. Which ones?
- foobiekr 5y ago
  Please provide examples of (4). I have worked for HW companies pretty much all of my career and (4) is news to me. I would very much like to understand what you're seeing.
  - contingencies 5y ago
    Let's just say regarding a major facility for a major CM over the last few years myself and agents have dealt with them a few times, the first time a well-meaning manager said "stay away, this company is bad news". Everything I have since learned (tour of facility witnessing old tech, dinosaur client base, partial selloff of site, bizdev literally stating their reason for not taking on simple projects was complexity, employees covertly selling use of software the company has licensed on the market) reaffirm this perception. Whereas, the stock price doesn't. May as well be dogecoin.
foobiekr 5y ago
Can you provide examples of (2)? If we think it's bad now, wait until the dozen or so AI chip startups have their moments of reckoning.
bsder 5y ago
> A bunch of recent high profile failures have caused VCs to cool on the space. VCs have been "cool" on the hardware space since 2001. Why fund hardware which can take 5-10 years to go somewhere when you can fund the latest social garbage fad and it will take off or fail completely within 36 months?
Malodavid 5y ago
Definitely, chips and other components shortages are getting increasingly serious, and costs are going through the roof; voltage regulators that normally cost 50 cents have been selling for as much as $70. There is indeed a lot of demand for chips and electronic components of all kinds but I understand that manufacturers claim is not real demand, is just a spike caused by uncertainty in international supply chains. https://www.taipeitimes.com/News/biz/archives/2021/04/22/2003756110 https://www.taipeitimes.com/News/biz/archives/2021/04/22/200... Just like we all saw a lot of people buying toilet paper like crazy at the beginning of the pandemic, well, there is also a lot of hoarding by big tech companies that make this shortage likely to last well into 2022. So, they're not exactly willing to expand capacity for a demand that is most likely to go away eventually. So indeed, it is a challenging time to design and manufacture hardware; all the big players are buying it all. The only advice I could give to anyone that is starting to design their electronics to make the design as flexible as possible, leave room on the PCB for 2 or more alternative components. You could even try to make 2 different PCB layouts and choose one or the other based on price and availability of components, oh and try to delay components selection as much as possible, that's the most useful advice I've read https://titoma.com/blog/reduce-component-lead-time https://titoma.com/blog/reduce-component-lead-time

by nrp 5y ago

bruce343434 5y ago

> A bunch of recent high profile failures have caused VCs to cool on the space. Could you expand on this?

bombcar 5y ago
A successful startup allows others to claim that they’re “Uber for pets” which encourages VC money - but if there are famous explosions in the ears all of a sudden you have to explain why you’re not “Wework for chips” which makes it harder to get funding started. When a gold rush is on nobody gets yelled at for buying shovels even if they lose money. But going against “conventional wisdom” requires either entirely independent VC or investors who really trust you.
- deleted 5y ago
  [deleted]

contingencies 5y ago

4. Certain major contract manufacturers are imploding. 5. China-West tensions, including HK/mainland border being locked down, are creating additional difficulties. 6. Current China anti-platform/monopoly drive has cooled domestic VC activity and appetite for vertical integration. (Full disclosure: Cross-border hardware venture founder in China.)

baybal2 5y ago
> 4. Certain major contract manufacturers are imploding. Which ones?
foobiekr 5y ago
Please provide examples of (4). I have worked for HW companies pretty much all of my career and (4) is news to me. I would very much like to understand what you're seeing.
- contingencies 5y ago
  Let's just say regarding a major facility for a major CM over the last few years myself and agents have dealt with them a few times, the first time a well-meaning manager said "stay away, this company is bad news". Everything I have since learned (tour of facility witnessing old tech, dinosaur client base, partial selloff of site, bizdev literally stating their reason for not taking on simple projects was complexity, employees covertly selling use of software the company has licensed on the market) reaffirm this perception. Whereas, the stock price doesn't. May as well be dogecoin.

foobiekr 5y ago

Can you provide examples of (2)? If we think it's bad now, wait until the dozen or so AI chip startups have their moments of reckoning.

bsder 5y ago

> A bunch of recent high profile failures have caused VCs to cool on the space. VCs have been "cool" on the hardware space since 2001. Why fund hardware which can take 5-10 years to go somewhere when you can fund the latest social garbage fad and it will take off or fail completely within 36 months?

Malodavid 5y ago

Definitely, chips and other components shortages are getting increasingly serious, and costs are going through the roof; voltage regulators that normally cost 50 cents have been selling for as much as $70. There is indeed a lot of demand for chips and electronic components of all kinds but I understand that manufacturers claim is not real demand, is just a spike caused by uncertainty in international supply chains. https://www.taipeitimes.com/News/biz/archives/2021/04/22/2003756110 https://www.taipeitimes.com/News/biz/archives/2021/04/22/200... Just like we all saw a lot of people buying toilet paper like crazy at the beginning of the pandemic, well, there is also a lot of hoarding by big tech companies that make this shortage likely to last well into 2022. So, they're not exactly willing to expand capacity for a demand that is most likely to go away eventually. So indeed, it is a challenging time to design and manufacture hardware; all the big players are buying it all. The only advice I could give to anyone that is starting to design their electronics to make the design as flexible as possible, leave room on the PCB for 2 or more alternative components. You could even try to make 2 different PCB layouts and choose one or the other based on price and availability of components, oh and try to delay components selection as much as possible, that's the most useful advice I've read https://titoma.com/blog/reduce-component-lead-time https://titoma.com/blog/reduce-component-lead-time