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Anyone who worked in technology before 2003 can tell you that it\u2019s no coincidence that startups have exploded in the past 10 years \u2013 when servers costs when to zero, and open source software caught up to its proprietary counterpart, \u00a0it didn\u2019t matter how many people (a lot) were on the web, because scalability<\/i> was born. \u00a0Today\u2019s software companies are born in minutes, which is why today\u2019s VCs are predominantly focused on software; however, if Google\u2019s acquisition of NEST earlier this year, as well as the dozen other hardware & robotics acquisitions it\u2019s made in the past 18 months are any indication, the real money is in hardware.<\/p>\n
The \u201cHardware Revolution,\u201d the idea that, like the software revolution 10 years ago, the cost of building a hardware company will approach zero, is well on its way. Open source hardware like Raspberry Pi and Arduino make learning & building hardware more accessible. \u00a03D Printers & Fab Labs are making rapid prototyping, one of the most costly parts of a hardware company in terms of time, quicker and less expensive. Lastly, with China\u2019s economy opening up internationally, cities like Shengzen are establishing a presence and welcoming foreign hardware startups, enabling hardware CEOs to quickly build relationships with manufacturers.<\/p>\n
Building your own software on top of the hardware is still 90% of the work; however, that 90% of work takes less and less resources to operate, and yet, Venture funding still lacks for most hardware startups, because most VC firms have built their success on their knowledge of Software, and thus, are weary of Hardware. \u00a0There are, of course, exceptions: Thamlic Labs is backed by Spark Capital, and Bloomberg Capital\u2019s Matt Turck runs the NYC HardWired meetup for Connected Hardware & Internet of Things; however, what has really enabled hardware startups to thrive has been crowdfunding.<\/p>\n
The financial investment \u2013 \u201cpre-orders,\u201d if you will \u2013 are of course a great way to bootstrap manufacturing costs (everything\u2019s cheaper in bulk, all the way down the value chain); however, where Crowdfunding really gets interesting is in how it enables startups to do product validation & price testing, which explains why Venture Funded startups like Thalmic labs still chose to do pre-orders, and why successful funding campaigns by Oculus Rift & SmartThings were followed quickly by venture funding.<\/p>\n
While the campaign videos have become a bit too structured \u2013 sell the problem, make it personal, show a woman jogging, etc. \u2013 what makes campaigns successful hasn\u2019t changed much, and platforms like Indiegogo are learning every day how campaigners can leverage crowd funding.<\/p>\n
The KPIs have become as strict as any software startups \u2013 what is the average donation price, how many supporters, how much are people willing to pay for he product (done by testing pricing throughout the campaign via various levels of prizes) \u2013 and while software VCs still don\u2019t seem to get it (WiThings most recently raised funding from the French Government\u2019s fund BPIFrance, despite there being over \u20ac1.5 Billion in capital available in France alone), hardware founders certainly do.<\/p>\n
There are still some barriers to the hardware revolution \u2013 distribution is still a pain, and if you think Google AdWords are expensive, try doing a marketing campaign for a hardware product. And yet, behind every problem is an opportunity – much like crowdfunding responded to one of hardware\u2019s problems \u2013 and so, as the Internet of Things & Connected Objects continue to grow in the coming years, those startups who eliminate those problems (much like Cloud Hosting eliminated expensive server costs) stand not just to make a quick buck, but to become the cornerstone in the future of Connected Hardware.<\/p>\n
These problems include treating and communicating data \u2013 IoT Telco\u2019s like SIGFOX are building their own network, while many think that low-energy Bluetooth coupled with the right existing network will do the trick. Interoperability between devices is a huge pain, and services like IFTTT are tackling this their own way, while other players \u2013 big (Qualcomm) and Small (Sen.se) \u2013 look to be the IoT cloud.<\/p>\n
We\u2019ll be exploring these problems & more with many of the players mentioned above at the Connected Conference<\/a>, June 18th<\/sup>-19th<\/sup>, in Paris. Sign up today and save 200\u20ac on your Very Early Bird ticket<\/a><\/i><\/p>\n","protected":false},"excerpt":{"rendered":" Anyone who worked in technology before 2003 can tell you that it\u2019s no coincidence that startups have exploded in the past 10 years \u2013 when servers costs when to zero, and open source software caught up to its proprietary counterpart, \u00a0it didn\u2019t matter how many people (a lot) were on the web, because scalability was<\/p>\n","protected":false},"author":77,"featured_media":23642,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"subtitle":"","footnotes":""},"categories":[10564],"tags":[8019],"class_list":["post-23641","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tech-2","tag-crowdfunding-en-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts\/23641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/users\/77"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/comments?post=23641"}],"version-history":[{"count":0,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts\/23641\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/media\/23642"}],"wp:attachment":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/media?parent=23641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/categories?post=23641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/tags?post=23641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}