Launching a hardware startup? The stars are aligned in your favor Launching a hardware startup is more difficult than springing software upon the world – all a coder needs, after all, is a keyboard and a creative mind – but recent developments are removing barriers and creating a new startup gold rush. "It used to be really difficult to start a hardware company," Renee DiResta, a Principal …
I thought the current situation was -
1. Design an original device concept.
2. Announce original device concept.
3. 24 hours later get blown out of the water by Apple/Google/Cisco/MS/HTC/Broadcom/Intel/Monster/EasyJet legal dept with patent infringement on the basic gist of 5% of the overall concept (say the device requires some form of electricity to work or you need to touch it).
4. Sign everything over to one or more of the above for next to nothing.
5. File for bankruptcy.
Rinse and repeat.
As someone engaged in hardware design and development, I whole heartedly agree. The comment regarding large companies taking legal action is all dependent on how you approach IP. That company that produced an obvious knockoff of the Blackberry keyboard for the iPhone was asking for the subsequent lawsuit. But those who try something new, such as the recent innovative Android phones from China (OnePlus One etc), or Pebble (better example really, being it was crowd funded and not founded by industry veterans). My company is also using such accessible concepts to develop our circular wireless device (!). It was great to quickly model it in 3D and then have a 3D Print made to try out the size and ergonomics, all for not very much money. Further, software allows circuits and designs to be simulated prior to development and production, saving on expensive mistakes. Etc.
Back until the 1990s you could still actually make state of the art hardware at home. Soldering TTH or SMD technology is feasible in even a simple home laboratory. However today you need more and more high pincount devices like BGAs which need special techniques and expensive tools.
So this means that every production run, even for prototypes, is fairly expensive since you cannot make an individual device, but have to make at least a dozen or so.
But surely the design stage is to prove concept and function? Even in the late 70's and early 80's companies like Ferranti were offering custom ULAs, so just get the design right [ ;-) ] establish market potential and batch order. These days for simpler stuff I'd be using PIC style devices and soft-wire stuff. With SoC the fiddling moves ever more towards code-level.
Soldering stuff is fun, and you feel like you are connected to the build, but for anything commercial-scale the production techniques have to step up - there's still a place for handiwork, it's just not viable for most of what goes into bulk items (mobo-based things, etc.). I visited the Pioneer factory in Wakefield well over a decade ago - might have even been late 90's - and even back then they were positioning the heftier components on cable TV box boards (for Canal in France, IIRC) using cameras and robots, with the boards later being floated across solder baths to do entire boards in one pass per side. People just fed the parts and did a bit of moving and shifting - the bulk happened using conveyors.
Sure there are some low-barrier-to-entry tools and development kits etc out there. Linux can make the software cheaper.
But people expect a whole damn lot for not much. That makes it very hard to make the numbers stack up.
Let's say you wanted to develop something that needs a board somewhere functionally equivalent to a Raspberry Pi in a plastic case with some extras like NOR or NAND flash and a proper power supply. That's likely to cost you $200k or so of development costs, $50k in tooling costs and about $40/unit in parts costs. If you're only making 10k of the these then your break even is around $75.
And people will say:... but an RPi just costs $25.
It's very hard to make all the numbers stack up unless you're buildng products with very high margins.
There has been a resurgence in people building hardware. This is good.
However, a lot of it is quite simple stuff. I'm getting a bit tired of endless Arduino-style projects, involving an ATMega, a few bits and pieces wired to GPIOs, and a pile of C code. Sure, it's hardware, and sure there are plenty of gadgets out there that are like that (what does your smoke alarm do?) but how far can you go with this approach?
Are these startups building phones or laptops or servers or basestations or fancy RF things...? The hard engineering (20 layer PCB, 10GHz signalling, DDR3/4, PCIe gen 3) isn't happening outside large companies. The one place it is happening is China - the Shanzhai are making phones and tablets, which requires some decent engineering.
Maybe this is a function of commoditisation - BeagleBoards and Raspberry Pis already exist as components so we don't have to do that tedious work. But if you hit the limit of what's possible with them, you have a very steep wall to climb.
So IoT is the latest buzzword. Maybe you can do all of that with an Arduino. But if the volume's there it's almost certain that someone can do it cheaper and lower power with an ASIC - and which of these startups is doing ASICs? And if the volume isn't there, is there enough revenue to make it worthwhile except for niche products?
Someone recently said 'heavy semi[conductor development] is like steel and railroads' - in other words, needs lots of investment of money and time. Board-level stuff is less, but to do anything complex still ain't cheap or easy.
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