5 ms·

I'm talking about a new trend. The hardware companies we've funded haven't had time to grow into Dropboxes. But as I wrote, hardware companies are overreprese

by pg 14y ago

I'm talking about a new trend. The hardware companies we've funded haven't had time to grow into Dropboxes. But as I wrote, hardware companies are overrepresented among the most promising startups from the summer batch, as far as we can tell this early. True, hardware involves lots of schleps. But that means good ideas of this type are often lying around in plain sight, while all the other would-be founders are fixated on making the latest mobile social commerce app. (http://paulgraham.com/schlep.html http://paulgraham.com/schlep.html)

tptacek 14y ago
"Mobile social" is a new idiom, right? Maybe it's particularly good to be a hardware company when the solution to the problem you're tackling requires new hardware. For instance, if 50 years from now we're all going to be getting around on motorized skateboards. But if you watch Kickstarter, there are hardware proposals that are "hardware for its own sake"; those offerings might be structurally disadvantaged compared to iOS or Android software, and you might not want to start that kind of company as your first startup.
- pg 14y ago
  Well, that's certainly true. You shouldn't undertake schleps unless they're necessary, in your first company or successive ones for that matter.
batgaijin 14y ago
Are IP issues a bigger deal when considering hardware startups?
- fghh45sdfhr3 14y ago
  Actually I wonder if IP might be a bigger problem for software?
hnriot 14y ago
8% of such a tiny sample isn't anywhere near close to being able to extract trends. In such a volatile arena as investor funding even if the number of hardware companies doubled from 4% last year to 8% this, it's still noise. We (as a tech community) need to careful thinking so small. YC is tiny. If the article was the result of talking to other investors and a similar trend was identified across the board it might be newsworthy, but to anyone with any statistical background this isn't a trend, it's noise. That doesn't mean there isn't a trend, it just means this isn't in and of itself, evidence of one.
- sachingulaya 14y ago
  The sample space is all the startups that submit applications to YC--not the ones that are accepted.
  - 001sky 14y ago
    Out of 84 companies, 7 were making hardware. On the whole they've done better than the companies that weren't. Perhaps you could elaborate? This text 'sample' does not appear to play nice with your comment.
cs702 14y ago
I've sensed a bit of a trend (e.g., with YC startups like BoostedBoards and Double, and popular KickStarter projects like Ouya), but I'm having a hard time wrapping my head around the capital requirements and ultimate profitability of these startups as they attempt to scale up into larger businesses. Maybe I just have to shake off naive preconceptions about hardware businesses being hard and difficult-to-pivot. pg: if possible, I'd love to read your thoughts on how the economics of these businesses might evolve as they attempt to grow, especially as compared to software-only businesses.
- 001sky 14y ago
  The path-dependency (or difficulty of pivot) is an interesting angle. Certainly worth considering. Most product needs iteration if not outright pivoting. Perhaps the mitigating factor is that if the product is tangible, the need is also. SW is so powerful, as a concept, that i wonder if SW some startups may suffer from "too many degrees of freedom". Thus the ~inevitvble pivot -- combined with the ability to re-purpose a core of valuable skill-- is almost a more inherent characteristic of SW startup vs HW one. When considered in context of problem solving and product/market fit, &tc.
  - cs702 14y ago
    The issue, as I understand it, is not so much path-dependency per se, but the long lead times involved in the manufacture of new hardware at scale. Software has path-dependency too, but changing source code to modify a new software product is faster than changing physical machinery, processes, materials, suppliers, and logistics to modify a new hardware product.
    - 001sky 14y ago
      This is a good comment, and sheds more light on the subject. The long lead time is a question of agility. This is subtly but importantly different that path-dependency (considered more of a lock-in to an existing technology). The link is that the ways of making the company more agile (investing in specialized manufacturing/prototyping and/or inventory) tend to create a more path-dependent trajectory (or opportunity set). So, perhaps this is better said that HW has 'interial' dependency on initial trajectory if not true path dependency per-se. Even provided that the startup is low-capital/outsourcing model. I hope this does some justice to incorporating your point.
jiggy2011 14y ago
Perhaps hardware companies don't have the "dropbox" effect of such quick growth. Do you think though that hardware companies may be a less risky proposition in some ways? For example they are less likely to have the sort of network effects problem that some social media based application would.
- malandrew 14y ago
  Of all the companies they are funding, I could totally see Lockitron going viral. Once you have the app on your phone, you have the first key in your keychain. Once the price drops to like $50 a unit, you are in the realm of being super competitive with your standard physical lock, enough so that people would start looking at each key on their keychain as one that can be replaced.
shortlived 14y ago
Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task. Interesting linguistic tangent. I'm curious where you encountered schlep as a noun. My experience and various dictionaries define it as a verb ("to schlep"). E.g. "Oy vey. Do we really have to schlep over at this hour?" Maybe it was just artistic license.
- donaldc 14y ago
  There's a natural tendency in English to use as nouns words that were originally verbs. Examples: I'm going for a walk. I'm having a talk with someone. Dictionary definition or not, a google search for the phrase "a schlep" returns >60,000 results.
  - mjn 14y ago
    If the (recently added) part-of-speech tagging on Google Books is accurate, the chronology is the other way around: it used to be equally used as a noun and verb, but sometime in the 1990s the verb form became dominant: http://books.google.com/ngrams/graph?content=schlep_VERB%2Cschlep_NOUN&year_start=1900&year_end=2008&corpus=15&smoothing=3&share= http://books.google.com/ngrams/graph?content=schlep_VERB%2Cs...
  - dockd 14y ago
    A "gerund" is a noun that has "ing" added to it and is used as a verb.
    - lepton 14y ago
      The other way around. From Wikipedia: As applied to English, it refers to the use of a verb (in its -ing form) as a noun (for example, the verb "learning" in the sentence "Learning is an easy process for some").
- sbisker 14y ago
  You clearly haven't hung out with my grandmother. Schlep can definitely be used as a noun, and commonly is by native Yiddish speakers. (As in "Oy! What a shlep!" or "Picking you up during rush hour would be a shlep, how about you just take the bus?")
briguy 14y ago
On some level, Dropbox is a hardware company [1]. I think that once you have installed software at a clients location, you are in a different realm than simply being a cloud/software/service provider. The customer has full ownership of the device. I think that the move to hardware is tri-fold (a) hardware is easier now than ever (b) hardware is a good strategy and a natural barrier to entry for a startup (in general, less people grok hardware and systems software than they do web programming[2]) (c) a small/mini subconscious push-back against the Cloud[3] where more and more customers are being turned off by not owning something at the end of the day[4] [1] The hardware is the customers PC. [2] iOS device programming, w/ human interaction (gyroscope) has also been a natural training ground. [3] Of course, many Hardware companies these days Square, Dropbox, etc, will be paired with a cloud service. [4] Acqui-hires..."We are shutting Down. Please Download your stuff by next week. Thanks for being a User and getting me interest from a big fish, see you on my next startup"

by pg 14y ago

tptacek 14y ago

"Mobile social" is a new idiom, right? Maybe it's particularly good to be a hardware company when the solution to the problem you're tackling requires new hardware. For instance, if 50 years from now we're all going to be getting around on motorized skateboards. But if you watch Kickstarter, there are hardware proposals that are "hardware for its own sake"; those offerings might be structurally disadvantaged compared to iOS or Android software, and you might not want to start that kind of company as your first startup.

pg 14y ago
Well, that's certainly true. You shouldn't undertake schleps unless they're necessary, in your first company or successive ones for that matter.

batgaijin 14y ago

Are IP issues a bigger deal when considering hardware startups?

fghh45sdfhr3 14y ago
Actually I wonder if IP might be a bigger problem for software?

hnriot 14y ago

8% of such a tiny sample isn't anywhere near close to being able to extract trends. In such a volatile arena as investor funding even if the number of hardware companies doubled from 4% last year to 8% this, it's still noise. We (as a tech community) need to careful thinking so small. YC is tiny. If the article was the result of talking to other investors and a similar trend was identified across the board it might be newsworthy, but to anyone with any statistical background this isn't a trend, it's noise. That doesn't mean there isn't a trend, it just means this isn't in and of itself, evidence of one.

sachingulaya 14y ago
The sample space is all the startups that submit applications to YC--not the ones that are accepted.
- 001sky 14y ago
  Out of 84 companies, 7 were making hardware. On the whole they've done better than the companies that weren't. Perhaps you could elaborate? This text 'sample' does not appear to play nice with your comment.

cs702 14y ago

I've sensed a bit of a trend (e.g., with YC startups like BoostedBoards and Double, and popular KickStarter projects like Ouya), but I'm having a hard time wrapping my head around the capital requirements and ultimate profitability of these startups as they attempt to scale up into larger businesses. Maybe I just have to shake off naive preconceptions about hardware businesses being hard and difficult-to-pivot. pg: if possible, I'd love to read your thoughts on how the economics of these businesses might evolve as they attempt to grow, especially as compared to software-only businesses.

001sky 14y ago
The path-dependency (or difficulty of pivot) is an interesting angle. Certainly worth considering. Most product needs iteration if not outright pivoting. Perhaps the mitigating factor is that if the product is tangible, the need is also. SW is so powerful, as a concept, that i wonder if SW some startups may suffer from "too many degrees of freedom". Thus the ~inevitvble pivot -- combined with the ability to re-purpose a core of valuable skill-- is almost a more inherent characteristic of SW startup vs HW one. When considered in context of problem solving and product/market fit, &tc.
- cs702 14y ago
  The issue, as I understand it, is not so much path-dependency per se, but the long lead times involved in the manufacture of new hardware at scale. Software has path-dependency too, but changing source code to modify a new software product is faster than changing physical machinery, processes, materials, suppliers, and logistics to modify a new hardware product.
  - 001sky 14y ago
    This is a good comment, and sheds more light on the subject. The long lead time is a question of agility. This is subtly but importantly different that path-dependency (considered more of a lock-in to an existing technology). The link is that the ways of making the company more agile (investing in specialized manufacturing/prototyping and/or inventory) tend to create a more path-dependent trajectory (or opportunity set). So, perhaps this is better said that HW has 'interial' dependency on initial trajectory if not true path dependency per-se. Even provided that the startup is low-capital/outsourcing model. I hope this does some justice to incorporating your point.

jiggy2011 14y ago

Perhaps hardware companies don't have the "dropbox" effect of such quick growth. Do you think though that hardware companies may be a less risky proposition in some ways? For example they are less likely to have the sort of network effects problem that some social media based application would.

malandrew 14y ago
Of all the companies they are funding, I could totally see Lockitron going viral. Once you have the app on your phone, you have the first key in your keychain. Once the price drops to like $50 a unit, you are in the realm of being super competitive with your standard physical lock, enough so that people would start looking at each key on their keychain as one that can be replaced.

shortlived 14y ago

Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task. Interesting linguistic tangent. I'm curious where you encountered schlep as a noun. My experience and various dictionaries define it as a verb ("to schlep"). E.g. "Oy vey. Do we really have to schlep over at this hour?" Maybe it was just artistic license.

donaldc 14y ago
There's a natural tendency in English to use as nouns words that were originally verbs. Examples: I'm going for a walk. I'm having a talk with someone. Dictionary definition or not, a google search for the phrase "a schlep" returns >60,000 results.
- mjn 14y ago
  If the (recently added) part-of-speech tagging on Google Books is accurate, the chronology is the other way around: it used to be equally used as a noun and verb, but sometime in the 1990s the verb form became dominant: http://books.google.com/ngrams/graph?content=schlep_VERB%2Cschlep_NOUN&year_start=1900&year_end=2008&corpus=15&smoothing=3&share= http://books.google.com/ngrams/graph?content=schlep_VERB%2Cs...
- dockd 14y ago
  A "gerund" is a noun that has "ing" added to it and is used as a verb.
  - lepton 14y ago
    The other way around. From Wikipedia: As applied to English, it refers to the use of a verb (in its -ing form) as a noun (for example, the verb "learning" in the sentence "Learning is an easy process for some").
sbisker 14y ago
You clearly haven't hung out with my grandmother. Schlep can definitely be used as a noun, and commonly is by native Yiddish speakers. (As in "Oy! What a shlep!" or "Picking you up during rush hour would be a shlep, how about you just take the bus?")

briguy 14y ago

On some level, Dropbox is a hardware company [1]. I think that once you have installed software at a clients location, you are in a different realm than simply being a cloud/software/service provider. The customer has full ownership of the device. I think that the move to hardware is tri-fold (a) hardware is easier now than ever (b) hardware is a good strategy and a natural barrier to entry for a startup (in general, less people grok hardware and systems software than they do web programming[2]) (c) a small/mini subconscious push-back against the Cloud[3] where more and more customers are being turned off by not owning something at the end of the day[4] [1] The hardware is the customers PC. [2] iOS device programming, w/ human interaction (gyroscope) has also been a natural training ground. [3] Of course, many Hardware companies these days Square, Dropbox, etc, will be paired with a cloud service. [4] Acqui-hires..."We are shutting Down. Please Download your stuff by next week. Thanks for being a User and getting me interest from a big fish, see you on my next startup"