The trend towards more hardware-product startups in the sf bay area is real and there is more evidence than just the increase and quality of yc hardware compani

The trend towards more hardware-product startups in the sf bay area is real and there is more evidence than just the increase and quality of yc hardware companies that pg wrote about. There are new hardware focused incubators (like Lemnos Labs), more hardware hackathons, and there's been growth in the sensor and hardware meetups for the past couple years. However, it's possible that innovation in hardware technologies is out of reach of startups. I'm differentiating here between hardware-tech and hardware-product startups. Of course there are hardware startups that are attempting to bring new technology to market (go Integrated Plasmonics, and 3Scan!). Interestingly, a good indicator of whether a startup is developing an innovative technology is that Peter Thiel is invested in it--many of his fund-ees are slaving away in labs scattered around SF. The failure modes of these hardware-tech companies will be more interesting than the hardware-product startups. These companies may take a much longer time to develop tech, then the product using that tech, and then fail, because the market they try to disrupt with their technology may be disrupted by other technologies with better economics--energy tech is full of these sorts of baby elephant skeletons. Still, successful investment in real hardware innovation that wins leads to companies like the next GE, Intel, or AT&T so it makes sense for investors with deep enough pockets to aim for these. Hardware products that simply integrate existing commodity components (like Blossom Coffee) have a pretty well understood binary risk profile, they either they hit or they don't. The new hardware renaissance PG is observing is based on the reduced cost of production, and new ways to crowd fund these sorts of companies: things you might prototype in TechShop (shared tools space) and sell via Kickstarter.