Silicon Valley, and much of the startup community, has been enthralled with software for years, but the tides are turning and hardware startups are gaining momentum. Investors are taking hardware startups serious—since 2010, venture capital investment in hardware startups is up more than 30x (Tech Crunch). Venture capital investment in connected device hardware startups reached approximately $1.48 billion in 2014, more than triple the amount of two years earlier.
A New Wave Of Opportunity
Advances in technology, coupled with hardware accelerators and incubators, are ushering in a new wave of opportunity for hardware entrepreneurs. Creating a functional prototype is no longer a hassle thanks to design software advances and 3D printing technology. Entrepreneurs are able to design and develop prototypes in a matter of days instead of months. After the prototype is complete, many of these hardware incubators and accelerators then help turn this prototype into a working, production-ready product within a matter of months.
By reducing the product development timeline, startups are able to get their idea built, tested, manufactured and on to store shelves much faster than we have ever seen before. Fitbit, Nest and GoPro are prime examples of companies that have paved the wave for hardware startups and demonstrated to investors that there is tremendous profitability in this startup segment. While distribution and manufacturing still have their inherent challenges for hardware startups, they are becoming more and more accessible.
Reaching Out To The Crowd
Hardware startups are tapping into their network and reaching out to the crowd. While crowdfunding has continued to revolutionize investing as we know it, hardware startups are reaping the benefits. A quick search on Kickstarter shows you that there are hundreds of hardware startups at any given time searching for funding. One of the most notable, The Coolest Cooler, raised $13 million (26x their funding goal) in 2014. Reaching consumers used to be a challenge, but that is no longer the case. Crowdfunding is not only helping raise capital, it is also validating ideas and build a relationship with consumers early-on.
An Exciting Future
“When building a new hardware product becomes as easy as making an iPhone app, we will have truly ushered in a golden era of innovation.” Hardware startups are playing a critical role in making the new industrial revolution a reality. As barriers to entry continue to diminish, we will begin to see more hardware startups debut and increased investor activity.
3D Innovations is a Product Development Company – from the 3D Design to a fully functional 3D Prototype & Product.
Startup Connector is a Manufacturing Accelerator helping companies commercialize—turning ideas into products.