I'm a bit out of the loop on hardware startups, but has YC funded many successful hardware startups? The only one I've heard of is Pebble.
Lowering the barrier to hardware startups is an awesome thing, of course. Hardware has a greater potential to directly impact lives at this point than software. There's tremendous software power locked up in the small, awkward-to-use computing devices we call phones, tablets, laptops, desktops, and servers.
Not to nitpick, but at least some of these arguably haven't gotten far enough along yet that they can reasonably claim to be "successful." Thalmic is just getting early products to market, Helion hasn't yet built a commercial fusion reactor, etc.
It doesn't follow from YC's success with software companies that the model will be similarly successful for hardware companies. It's still very much an experiment at this point, and "it was once an unknown for software companies" doesn't imply that hardware companies will achieve similar success with the YC model.
Sure, but it does mean that "few successful companies so far" shouldn't be taken as a death knell for YC's forays into hardware. By fairly direct analogy, the majority of startups not making a profit in their first month will fail, but the majority of successful startups weren't making a profit in their first month.
Sure, that's a fair statement. I'm not saying that the lack of success so far is a knock against YC for hardware startups. Rather, the similar lack of success for software startups in YC at the same stage of development, and the subsequent success they did enjoy, is not a point in favour of YC's suitability for hardware startups.
Hardware and Software startups are sufficiently different in their needs and life cycles that it would be specious to use the success of a particular program for the one as indicative of its suitability for the other. Similarly, the sorts of b2c startups that YC typically funds are sufficiently different from b2g startups like Palantir that I don't think you could claim Palantir would have benefitted from YC based solely on the experiences of b2c startups.
"... It doesn't follow from YC's success with software companies that the model will be similarly successful for hardware companies. ..."
That is true. A better way to think of it, might be as an experiment. Do you remember when YC was started funding startups? The tech group-thought at the time: a toy, a joke, nothing serious, never to gain traction.
And not to be overly negative but this announcement would appear to be recognition that HW startups in YC are struggling with a range of issues that required these steps to be taken thus making it even more challenging to assume success in SW will equate to success in HW.
I think you're right. YC was lacking all of the resources that other HW accelerators provide (it's highly specialized). But looks like they now know what HW startups need, so look for YC to be a force in HW.
Hundreds of millions of dollars in sales doesn't count as success? Which non-yc hardware companies started in the last several years would you count as successful?
It might. But profitability is important as well. Not a comment on any particular company but the idea that a company that has millions in revenue but no profits (and is floated by investors) is successful is not absolute.
>> Helion hasn't yet built a commercial fusion reactor
I agree with your point, but at the same time it is somewhat amazing that we live in a world where a company can get VC funding to even make an attempt on something as ambitious as fusion.
I don't mean to insult you or criticize your post in any way, partly because I agree with you, but that is a lot of qualifiers for one short sentence. Diplomatic tones require them though, I suppose.
I did not know that. I assumed they got them from an OEM, considering they are so cheap and readily available.
Even if they were building their own sheet metal lockers, I still don't think they were a "hardware" company. They had a great service and that's what they were selling.
They had to integrate the electronics as well. The most successful hardware companies (e.g. Apple) are building integrated systems including software and services.
I don't disagree with assertion about Apple and similar companies but they end up selling you a physical hardware product.
Bufferbox offered a service and didn't sell you a product therefore I don't think they were "hardware" company. The hardware was means to an end.
I don't think it lessens what they did. It was a good service.
Walmart has a large IT infrastructure, with sys admins and in-house developers. They also manage a lot of buildings, and warehouses. I wouldn't consider them an IT company, a property management company, or a logistics company.
This is a tough call but Walmart's IT services is a core technology they own but its not customer facing at all. Bufferbox on the other hand had this customer facing hardware. In fact that hardware was a core component of their user experience. They could royally muck it up. They didn't. Kudos to them.
Maybe not their IT service, but their logistics and building operations certainly are.
I agree with your points regarding BufferBox, but I wouldn't say they are a hardware company producing a hardware product that you can sell to a customer. They were in an entirely different space, with very different set of challenges.
The YC post concerned companies that sell hardware to end users. Further, the initial post in this chain was someone asking if YC has had other hardware companies beyond Pebble. I don't think BufferBox is in that category.
I think there is a large difference. It requires a different skillset to manufacture 1000 of something that consumers will buy vs manufacturing customer touch points that are owned, and serviced by the company.
Your manufacturing pipeline, volumes, service issues are all very different. So as great as BufferBox was I don't think they were a hardware company and certainly not for the purposes of this thread. I am not discounting their abilities or what they made but based on my experience they are apples and oranges.
Most of the problems kickstarter companies run into are unique supply chain, and manufacturing issues that BufferBox wouldn't have had to deal with.
Additionally, a big part of what BufferBox offered would have been in their app, and website. A locker that you can remotely lock and unlock is not difficult from an electronics point of view and had been around before.
So would you consider SpaceX to be a service company and not hardware? They build rockets to deliver stuff for customers. I think defining whether a company is a HW company is too narrow. If you need to build HW to build a business of serving customers, or need to build HW to sell to customers, you need to build hardware in either case.
I read it twice to see if there was any mention of the word 'Shenzhen'. It's difficult to not keep that in the loop, for a hardware startup anywhere in the world. Even SF.
I make robots in Chicago and sell them on Tindie. My top two competitors are in Finland and Japan. Yes, I hear Shenzhen is crazy awesome, but try not to let location dominate your world view of what is easy or difficult. Making a good hardware product is difficult, no matter where you make it.
When I need to make 10,000 cheap and fast, yes, I'll most likely be making a pilgrimage to Shenzen. Totally agree with your point. But not every startup (especially low-volume, high-price, high-touch b2b) needs to focus at the start on making 10,000 units cheap and fast.
I know what you mean. I make development boards(Tah) out of India.
But I understand that most of what I use comes some way or the other from Shenzhen. A lot many times there are things that I am using which probably are outdated in China.
Relevant article by bunnie :
http://www.bunniestudios.com/blog/?p=4297
The resources listed here are geared for prototyping that allows rapid iteration of designs and ideas. From electronics prototyping (Tempo Automation) to mechanical (Fictiv). Having been to Shenzhen for manufacturing, it is absolutely great once you get to large volume - you can't beat the robust ecosystem anywhere. For initial runs of designs (quantity 1-10 of something), TIME is absolutely key: dealing with Shenzhen takes extensive communication and long lead times for each production run that a startup or even a big company can't afford.
Absolutely. At Other Machine Co., (https://othermachine.co/) our volumes just aren't big enough to go to Shenzhen yet. Not to mention the fact that the upfront costs require significant upfront capital investments. That's why we make a product that lets companies (including our own) prototype PCBs and other parts themselves.
Why not? I've used milled PCBs for commercial prototypes as they're an order of magnitude cheaper than a fab given the turnaround time. You can get down to 0.5mm pitch easily.
You don't get soldermasks and vias are normally riveted (good enough). For most people, two layers is enough and if you can design the board well you shouldn't need much routing on the second layer.
Without a soldermask, how do you mount anything SMD finer than about a SOT-23? (only a slight exaggeration)
I can't imagine mounting even a simple ATTiny, let alone a quad-flat anything or a bunch of 0603s without a solder mask.
I'm sure that some use cases can get by with all DIP, through-hole, and similar-sized parts, but it's hard to design a product that can later scale up cost-effectively without being able to use surface-mount parts. There's a reason the mass production all switched over to SMD->cost.
Remember there are plenty of companies who need the odd PCB, but aren't in the PCB business.
Simple power/control boards (weird voltage, multiple outputs) that aren't available off the shelf from RS or Farnell. None of those boards need to be more than two layers. I've designed lens focus control boards that only required a single layer.
Yes of course if you're doing RF or fast serial you'd be daft to do it on a milled board, but they are convenient sometimes.
In the UK, you're looking at ~£50 for a short turnaround from a fab house like PCBTrain. From there a single small two-layer board, 50x60mm, 15 weekday turnaround is £33 plus shipping . It scales very well, but that's not the point for a prototype. Want that board this week? £90. Oshpark is great, but only if you can afford to wait the 20 or so days it takes to get to you.
If anyone can recommend a good, cheap fab house in the UK I'd be interested to know about it!
Perfboard is fine up to a point, but I find it tends to get messy, even for simple boards, and it's not terribly optimal with regard to space. You're out of luck (without bodging) if any component is surface mount or isn't 2.54mm pitch.
Milling is a nice stopgap when you need a single copy of a board that's a bit too complicated for perfboard (i.e. different pitch/smt parts) but isn't worth spending 10x the cost for a professionally made board. With milled boards you can have custom shapes, cutouts and so on. If you're trying to design a board to fit inside some housing with a funny shape and standoff points, milling the board to fit is a nice and cheap.
Assembling is being democratized, PCBs are being made available faster than ever, but that still doesn't level up with the ecosystem that is China. Especially, when you are prototyping.
Link i posted in earlier comment points out exactly this : http://www.bunniestudios.com/blog/?p=4297
It's a great initiative by YC, but hopefully there is more to come.
We decided to do all of our prototyping and short runs in the valley. You're risking your company's failure if you wait around for months dealing with logistics in China for each design iteration.
PCB manufacturing and assembly is one part of the equation.
The other important thing that we are missing out on (by not being wired into the whole Shenzhen scene) is the hardware that they have. The kind of chips they are using are not even available to us but are cheaper and better by an order of magnitude.
We are talking about 35$ computers, whereas they are using 12$ phones. All of this comes under the Gongkai method of 'innovation'.
I hope this is the start of US bringing manufacturing back to the States. There needs to be a hardware alley in silicon valley, much like the hardware alley in Shenzhen. For one thing, China is still a communist government that is authoritarian and ignores environmental pollutions (to the world). It also ignores human rights, supports dictators in Africa, and props up totalitarian government in Russia. These are good reasons to not do business with China.
Your other comments are factually true, but i don't think they're totally fair. To play devil's advocate: China acknowledge they've got a pollution problem and introduced several methods to start addressing it [1][2][3]. USA also ignores human rights[4][5][6][7], supports dictators and totalitarian governments[8], fights proxy wars and arms terrorists[9][10]. "These are good reasons to not do business with" the USA.
Also worth watching is India. The newly elected PM has taken "Make in India" quite seriously. The world's largest democracy is gearing up for a huge manufacturing boom.
Cheaper than the States, humane conditions, English as a medium of communication and excellent economic relations with most countries.
No disrespect, but India has horrible infrastructure, horrible treatment of women (rape, disregards from police on harassment cases), and other horrible things.
That's a lot of horrible. It's not all rainbows in India but downsides like the ones you mentioned are not all there is.
That said, I was vastly more impressed with the infra in SZ than Bangalore. SZ is a modern metropolis where Bangalore, well... It has pockets of shiny corporate havens I the suburbs. (FWIW, I personally prefer the grit of downtown BGL to SZ anyway)
I hope this is the start of US bringing manufacturing back to the States. There needs to be a hardware alley in silicon valley, much like the hardware alley in Shenzhen. For one thing, China is still a communist government that is authoritarian and ignores environmental pollutions (to the world). It also ignores human rights, supports dictators in Africa, and props up totalitarian government in Russia. These are good reasons to not do business with China.
They have a similar focus on hardware, great numbers re the percent of each class that gets funded, and have had some big successes like the Skully AR-1 intelligent motorcycle helmet:
http://www.skully.com/
WW recently toured the AQS facility in Fremont where a lot of well known products are being made like Makerbot and the Lift Labs tremor defeating spoon, and class members get frequent introductions to everyone from investors to Perkins offering billing for law services only on funding. It has been a pretty kickass program so far.
Is there any interest in (fabless) semiconductors? Traditionally thought as ridiculously capital intensive, there are a lot of new developments that have brought the time and costs involved down dramatically... My experience trying to fundraise for one shown there are a lot of misconceptions and (10-15 year) old ideas in the silicon valley investment space regarding fabless semi.
NOTE: I am the founder of REX Computing (check my submission & comment history for more info), and thus a bit biased for this.
The standard thing I have heard from VC's that don't know anything about semiconductors (Or have not been involved in it in this century):
"It will cost $100 million and take 3 years to have your first silicon. You have a 50% chance of even making it that far, and even then you only have a 10% chance of success (e.g. making any sales)"
So basically, the VC assumption is that it is a minimum $100 million and 3 years to see ANYTHING come out of it... and even if you get to silicon, there is only a 10% chance you'll be able to sell it. This is ridiculously pessimistic if you actually have a real design innovation.
Some of the new developments:
New tools: High Level Synthesis an "Hardware construction languages" (such as Chisel... http://chisel.eecs.berkeley.edu) radically bring RTL development time down. My team (consisting of just two of us) were able to complete the RTL of our new processor core in under 4 months (working on the weekends)... and that includes a lot of redesign and working on things other than the RTL itself. Chisel also brings the testing/verification time down significantly, as it can auto-generate Verilog optimized for either VLSI or FPGAs, and a high speed cycle accurate C++ simulator of the chip that is ~10x faster than the industry standard Verilog C Simulator. Even though Chisel really is this amazing, virtually no one outside of UC Berkeley knows about it.
2. FPGAs have gotten a lot better... I can say the synthesis tools still suck, but in terms of speed and testing ablility, you can test your chip on very cheap (Ours is $300) FPGAs these days.
3.Shuttle run/Multi project wafer services... a "block" (6 mm^2) on TSMC 28nm process is $90,000... and you get 100 chips back. A 16 core version of our chip is just two of these blocks.
4. Older process nodes are getting cheaper. Most fabs in the US are not going below 65nm or 45nm, and need to keep full utilization of their fabs. There are a lot of deals that can be had on these smaller fabs which are perfect for prototyping... A similar block size can be as cheap as $3 to 5k.
5. Moore's law dying is one of the best things that can happen to the industry. Instead of the ridiculous investment getting to the next process node, the fabs can invest in making the current process better and cheaper. This will bring down the cost of very good, proven processes (like 28nm, and potentially 14/16nm in ~3 to 5 years), making fabrication even cheaper and more widely available.
I'm happy to answer any questions!
EDIT/TLDR: Based on my own startup's current plan and estimates, it is possible to prototype (get 100 chips back) an entirely new processor architecture for under $2 million, and it is possible to go into mass production with that design for $10 to $15 million.
What technology are you referring to, specifically? Most large semiconductor companies these days are fabless (Qualcomm, AMD, NVIDIA), or just license their designs/IP (ARM, Imagination, Rambus). Fabless is not really a new thing, it's just a lot cheaper than most people imagine.
Derp, just got around to googling fabless semiconductor. I had assumed fabless meant a way of creating integrated circuits without expensive silicon processing facilities, clean rooms, etc...
I imagined something like 3D printing/laser cutting for silicon chips.
Are any of these resources available for anyone who isn't already a YC founder? Does that make sense?
Wouldn't it be valuable to give interested folks who aren't yet in YC a place to do their prototyping, get discounts, and help, and then use it as lead gen for the next batch?
Think of all the companies that could exist but don't because they don't have access to these resources.
We (https://circuithub.com, YC W2012) are offering special terms to YC co's but we might be able to help you out too. Drop us an email at support@circuithub.com :-)
What YC is doing is bundling discounts on PCB prototyping, and 3D printed parts. The rest of the offerings are further down the stack (testing, RF, etc.) so the only thing you would be missing as a non-YC company trying to build a prototype to get into YC is discounts.
If you are hand assembling your prototypes then you only have PCB fabrication costs, which for a 2 to 4 layer board should be about $500 max for your protos (1 week turn). That should be doable for most start-ups, even if they need 3-4 spins.
What could also be valuable is having support accounts, escalation paths and relevant implementation docs/software stacks from the big CPU/Sensor/GPU/Bluetooth/Wireless companies. Getting information/support from these big companies if you have no track record can be excruciatingly inefficient.
They also are working on getting the tools that you need to design your prototype. Like Upverter (YCW2011) (https://upverter.com/) for designing your PCB.
This is a great question. On the softer side, coincidentally we launched our HW startup founder Q&A today. A few dozen founders (YC and otherwise) have graciously agreed to answer questions from aspiring founders. Post them here: http://forum.upverter.com/c/startup-questions
A lot of the very recent, surprising successes in hardware (Oculus, Pebble) were crowdfunded (specifically for those, Kickstarted). I would go as far to say that using a premier crowdfunding platform to test the market may be the best, lowest risk way to validate a hardware idea. Or at least crowdfunding lowers the barrier for hardware success from "damn near impossible" to "really really hard."
Side note for companies like Indiegogo, success at attracting device makers to use their platform is key to their growth. At CES alone they have something like 14 booths.
Less with hardware-specific expertise, more with crowdfunding, pre-sales, and bringing a product to market. Many highly-successful new hardware project launches have been powered by Tilt over the past year, to name a few: Navdy, Lytro Illum, Whistle GPS, and Eero (yesterday).
Indeed. But crowdfunding has opened up a new channel for hardware startups: preorders. It makes developing a hardware product, which used to be very difficult and take a lot of up-front investment, much more accessible. It's still difficult (see all of the infinitely-delayed crowdfunded projects), but has been getting steadily easier over the past few years. Crowdfunding serves as nondilutive financing to the startups and can also signal market validation to future investors. It is a very important part of the chain.
As others have noted, the pre-order route is often the best go to market strategy for new hardware companies, even if they have already raised a round. The buzz, evangelist community they build, feedback they receive, and the social proof they gather is often of a more lasting benefit than the pure pre-sales revenue. As others have already noted, Tilt has powered many of the recent massive hardware product launches that are going live on their own sites. More examples on https://open.tilt.com/preorders
Crowdfunding / pre-orders is definitely part of the expected business process for HW startups to launch these days.
As the first pre-order platform, Celery has powered successes like Pebble and Boosted Boards and helped them get to the next stage of their business.
The transformation over the past few years has been unreal and today is such an exciting time to be a HW startup. We personally can't wait to see what kinds of HW companies emerge next.
Yeah seems like a bit of a misfit. Check out Celery (https://www.trycelery.com/) for taking HW pre-orders. They also came out of YC. I believe they power pre-orders for guys like Pebble, August, Lockitron, Meta and Coolest Cooler etc.
An interesting thing that YC could do for hardware startups is provide discounted copies or license servers for some of the most commonly required but exorbitant softwares : Altium, Solidworks, Autodesk inventor among others.
>and we don’t shy away from expensive hardware--we’ve funded companies building things like nuclear reactors and rockets, which will require hundreds of millions of dollars in funding to succeed
I'd guess that it's part of a diversified approach. Yes, they are capital intensive, but YC isn't the one who will be investing the hundreds of millions, and if one of these is successful, then I'd say it's likely to be hugely successful and a worthwhile return for YC.
This can't come soon enough. I'm helping out on a hardware 'startup' (though I guess we don't really use that term) - coming from software its an incredibly challenging realm to work in.
Simply getting a functional prototype without easy access to a 3d printer, $$$ in compiler licenses for BT stacks, freakin custom batteries, etc etc.
Hi Rob, just saw FitGuard for the first time and it's a phenomenal idea.
I'd recommend getting in touch with motorcycle helmet manufacturers (particularly MotoGP and WSBK sponsors) because concussions are a huge issue in motorcycle racing. As your site states, concussion severity is very abstractly diagnosed without data, and your product can make a big difference. The doctor has a tough time deciding whether the athlete is fit to race if he's had a crash and a concussion, and it ultimately comes down to a qualitative decision made by the rider and doctor. Data can definitely help save lives here.
If I have time for the track this season, I'll definitely sign up as a tester. I've never had a concussion, but I sure as hell would want to know how fast my head decelerates after a crash before getting back on the bike.
Can't take credit for the idea, one of the founders is a Rugby player and had his clock cleaned on the field one too many times.
Data is my thing - there's a number of these types of products out there (Shockbox et al), the issue is that they all keep the algorithm quite close to their chest (fairly, I suppose!)
My role (in addition to helping out with the hardware) is the ecosystem around it. It's BLE capable, so while we can't make a diagnosis (all kinds of legal issues there), the hope is to aggregate impact data, improve the detection algorithm and be able to feed it back to the device as it improves - We're currently using a TI MCU that allows us to OTA update from the app.
I would love to start a hardware startup (I even have an idea!) but I have no idea how to assess the feasibility of my idea, or how to hire h/w engineers. And it's not a billion dollar idea, so maybe it's not in the YC wheelhouse, but I sure as hell think it'd be fun.
Thats horrible, but I don't see where it says Lockitron. If you thought Lockitron Bolt, I think thats different from the Bolt they were talking about.. https://www.bolt.io/
You are correct. I though Bolt == Lockitron Bolt. I did not realize they are two different companies. I will delete the original comment since it is inaccurate.
Lowering the barrier to hardware startups is an awesome thing, of course. Hardware has a greater potential to directly impact lives at this point than software. There's tremendous software power locked up in the small, awkward-to-use computing devices we call phones, tablets, laptops, desktops, and servers.